What are the consequences if the input tax is calculated incorrectly?
August 25, 2023 | 40,00 EUR | answered by Tobias Waldmüller
Dear tax consultant,
I am Anna Mühlberg and I run a small business that offers marketing services. In the past, I have always calculated my input tax myself, but now I have concerns that I may have made mistakes in the process.
I have delved into the topic of input tax and realized that it is crucial to calculate it correctly, as it directly impacts my VAT return. An incorrectly calculated input tax amount could result in me paying too much or too little VAT.
Therefore, my main concern is to understand what consequences there could be if the input tax was incorrectly calculated. Could this lead to legal consequences, such as a tax repayment or even a fine? Would this also have an impact on my financial situation or my reputation as a business owner?
I am greatly worried that I may have made mistakes in calculating the input tax and now want to ensure that everything is correct. Is there a way to correct any potential errors and what steps should I take in this case to avoid legal problems?
I thank you in advance for your support and look forward to hearing from you.
Best regards,
Anna Mühlberg
Dear Mrs. Mühlberg,
Thank you for your inquiry regarding the correct calculation of input tax. It is completely understandable that you are concerned about the accuracy of your bookkeeping and tax return, as errors in this area can have serious consequences.
First and foremost, it is important to understand that input tax is the value-added tax you pay on your business expenses and that you can reclaim from the tax authorities. Incorrectly calculated input tax can indeed have implications for your VAT return. If you deduct too much input tax, it can result in you paying too little VAT and therefore having to make a tax payment. Conversely, if you deduct too little input tax, you may end up paying too much VAT and potentially suffer financial losses.
In terms of legal consequences: if the tax authorities discover that you have incorrectly calculated input tax, it can lead to a tax estimation that may result in a tax payment. This could also lead to interest charges and possibly even a fine. Therefore, it is advisable to avoid errors in input tax calculation and to correct them if necessary.
If you realize that you have made errors in input tax calculation, it is important to correct them promptly. You can make a correction to your VAT pre-registration to rectify any mistakes. Additionally, you should review your bookkeeping and ensure that future calculations are accurate.
To protect your financial situation and avoid legal issues, I strongly recommend consulting a tax advisor. An experienced tax advisor can help you correctly calculate your input tax, correct any errors, and assist you in communicating with the tax authorities.
I hope this information is helpful to you and I am available for any further questions you may have.
Best regards,
Tobias Waldmüller
Tax Advisor
