Flat Rate for Input Tax in Annual Statement
Any and all business persons that add VAT to their invoice know that they can deduct the VAT billed to them by other businesses – the so-called ”input tax“. But what if your turnover was high and your investments were low? You can use a little-known flat rate – pursuant to §23 UStG i.c.w. §§69, 70 UStDV. However, this relief applies only for businesses required to keep tax records and not balance sheets. If your turnover was less than € 61,356 in the previous year, you are eligible.
A practical example: A journalist made € 60,000 plus € 9,600 turnover in 2006. He collected only € 2,000 on input tax. His VAT return would amount to a bill of € 7,600 (= € 9,600 VAT – € 2,000 input tax). If he takes advantage of the flat rate, he will be able to deduct 4.8% of his turnover or € 2,880 flat input tax. This will lead to a VAT payment of only € 6,720 instead of €7,600.
Below you will find the applicable flat for some common professions. If your trade is not listed, please consult your attorney or tax advisor.
I. Crafts
Bakeries: |
5.4 % of turnover |
Car repairs: |
9.1 % of turnover |
Printers: |
6.4 % of turnover |
Stone cutter: |
8.4 % of turnover |
Tailoring: |
6.0 % of turnover |
II. Retail
Animals and zoological demand |
8.8% of turnover |
Bicycles and mopeds: |
12.2 % of turnover |
Candy: |
6.6 % of turnover |
Clothing: |
12.3 % of turnover |
Drugstores: |
10.9 % of turnover |
Electrotechnical products, radio, TV, stereos |
11.7 % of turnover |
Flowers and plants: |
5.7 % of turnover |
Groceries: |
8.3 % of turnover |
Newspapers and magazines: |
6.3 % of turnover |
Shoes and shoe accessories: |
11.8% of turnover |
III. Trades
Hostels, hotels |
6.7 % of turnover |
Restaurants, bistros, bars, cafés |
8.7 % of turnover |
Transport of persons with cars |
6.0 % of turnover |
IV. Free Professions
Sculptors |
7.0 % of turnover |
Graphic artist |
5.2 % of turnover |
Painting artist |
5.2 % of turnover |
Freelancers for stage, film, radio, |
|
TV and recording studios: |
3.6 % of turnover |
High school teachers: |
2.9 % of turnover |
Journalists: |
4.8 % of turnover |
Writers: |
2.6 % of turnover |