Do I have to charge sales tax on my fees as a freelancer?
January 14, 2022 | 40,00 EUR | answered by Felix Schönecker
Dear tax advisor,
I am Mia Vöss, a freelance graphic designer, and I have recently started my business. In the past few months, I have received some commissions and fees from my clients. Now I am wondering whether I need to charge VAT on my fees as a freelancer.
My current situation is that I am working as a freelancer and have not charged VAT on my fees so far. However, I have heard that there is a turnover threshold that exempts me from VAT obligations. I am not sure if I have exceeded this threshold or if I am still below it.
My concerns are that I may be violating tax regulations if I do not charge VAT on my fees. Additionally, I want to ensure that I correctly report my income and avoid any issues with the tax authorities.
Therefore, my question to you is: Do I need to charge VAT on my fees as a freelancer? If so, at what turnover threshold am I required to do so, and what is the best way to proceed to do this correctly? Are there any exceptions or special regulations that may apply to my work as a graphic designer?
I look forward to your expert advice and thank you in advance for your support.
Best regards,
Mia Vöss
Dear Mrs. Vöss,
Thank you for your inquiry regarding the value-added tax liability as a freelance graphic designer. I am happy to help you clarify this question and provide you with the necessary information for correct implementation.
As a freelancer, you are generally subject to value-added tax liability if you reach certain revenue thresholds. Currently, the threshold for value-added tax liability is 22,000 euros per year (as of 2021). This means that once your annual revenue reaches 22,000 euros, you must calculate and remit value-added tax on your fees to the tax office.
If you have not previously calculated value-added tax on your fees and now realize that you may have exceeded the revenue threshold, it is important to act quickly. You should first make a detailed list of your previous revenues to determine if the 22,000 euro threshold has already been reached. If it has, you should immediately start calculating and remitting value-added tax on your fees.
It is important to properly declare your income to avoid issues with the tax office. If you are unsure whether you have reached the revenue threshold or what specific steps you need to take, I strongly recommend consulting a tax advisor. A professional tax advisor can provide you with individual advice and help you fulfill your tax obligations.
Regarding exceptions or special regulations for your work as a graphic designer, I can inform you that there are specific regulations in the area of value-added tax. For example, you may be exempt from value-added tax as a small business owner if your annual revenue is below the 22,000 euro threshold. In this case, you are not obligated to calculate value-added tax on your fees.
In conclusion, I recommend contacting a tax advisor promptly to clarify your tax situation and take the necessary steps. Professional advice can help you avoid tax issues and properly declare your income.
I hope this information has been helpful to you, and I am available for further questions.
Best regards,
Felix Schönecker
Tax Advisor
