Do I have to show VAT as a small business owner?
June 19, 2024 | 30,00 EUR | answered by Friedhelm Sauer
Dear tax advisor,
my name is Jürgen Brandes and I run a small online business where I sell handmade products. As a small business owner according to § 19 UStG, I am exempt from sales tax. Therefore, I have not been including value added tax on my invoices so far.
However, I have heard that under certain circumstances it may be beneficial to voluntarily show the value added tax. I am wondering if this could be advantageous for my company and if it is even possible to retroactively include value added tax on invoices.
I am concerned that by not showing the value added tax, I may be unattractive to larger business customers who rely on claiming input tax. On the other hand, I fear that including the value added tax could lead to higher prices and deter my customers.
Could you please explain to me the advantages and disadvantages for me as a small business owner of showing the value added tax? Are there ways to claim input tax even if I do not show value added tax? And what are the legal implications if I decide to include value added tax on my invoices in the future?
Thank you in advance for your assistance.
Kind regards,
Jürgen Brandes
Dear Jürgen Brandes,
Thank you for your question regarding value added tax and the invoicing in relation to your online business as a small business owner. It is understandable that you are considering whether it could be beneficial to voluntarily show the value added tax on your invoices and what impact this could have on your business.
First of all, I would like to emphasize that as a small business owner according to § 19 UStG, you are exempt from sales tax and therefore do not have to show value added tax on your invoices. This means that you do not have to pay sales tax to the tax office, which can be a relief especially for smaller businesses.
However, there are situations where it can be beneficial to voluntarily show the value added tax. For example, larger business customers who are themselves subject to sales tax may rely on claiming input tax from the invoices. Therefore, by showing the value added tax, you could become more attractive to such customers and expand your sales opportunities.
On the other hand, there is a risk that showing the value added tax could lead to higher prices and deter potential customers. Therefore, it is important to carefully consider the potential impact on your customers and your business before deciding to voluntarily show the value added tax.
If you decide to show the value added tax on your invoices, it is important to do so correctly and comply with the relevant legal requirements. You should ensure that your invoices contain all the necessary information and that you calculate and show the value added tax correctly.
It is also possible that as a small business owner, you may be able to claim input tax even if you do not show value added tax on your invoices. However, this depends on various factors and it is advisable to clarify this with a tax advisor.
In conclusion, the question of whether you should show value added tax on your invoices depends on various factors and should be carefully considered. I recommend contacting a tax advisor to receive individual advice and find the best solution for you.
I hope that this information has been helpful and I am available for any further questions.
Best regards,
Friedhelm Sauer
