Sales tax is a tax that is raised on nearly every service and every product in Germany. Sales tax is rendered by businesses to the tax office, but is ultimately paid by those who, for instance, benefit from a service or purchase a product.
The basis for calculating sales tax is the consideration paid by the service recipient or purchaser minus the sales tax paid. Sales tax generally amounts to 19%, although partial relief is possible and it then comes to only 7%. An exemption from sales tax is possible under certain circumstances.
A distinction must be made within the framework of the tax assessment period for sales tax between nominal and actual taxation. With regard to sales tax, it is necessary as a matter of principle to provide a monthly or quarterly turnover tax advance return. In principle, sales tax arises with the passing of the interim return period in which the service or delivery was performed. Nominal taxation means that the accrual is not dependant on the service or delivery having already been paid. Actual taxation, on the other hand, means that the sales tax need not be registered until it has actually been paid by the client. For this purpose, an application must be submitted to the tax office.
Sales tax law is complex and hard for a layman to understand. Businessmen subject to sales tax are faced with all kinds of obligations and certain deadlines must be kept. Recourse to an experienced lawyer is thus recommended.