The term annual sales tax return is a long word. However, this relatively long terminology does not mean anything that cannot be explained. Especially when you consider that the “annual sales tax return ” is made up of “ tax return ” and “sales tax”, it suddenly becomes logical. So: It is the tax return for the sales tax. It must include all sales tax prepayments, income and expenses.
What is a VAT return?
The tax return is generally the individual income tax return. But there are additional taxes for entrepreneurs that they have to pay. For example, many entrepreneurs have to file a sales tax return and a tax return for trade tax.
According to Foodanddrinkjournal, the annual sales tax return is not only mandatory for companies that are subject to sales tax, but also for small businesses. This also applies if you do not have to make advance registrations for sales tax. The annual sales tax return can easily be done and submitted electronically. It is no longer necessary to use the printer to send the documents to the tax office by post.
What does the annual sales tax return contain?
Basically, there is no difference between the annual sales tax return and the advance VAT return, but it is not about the declaration for the pre-registration period, but rather for a complete calendar or financial year.
In addition, the advance payments already made for the sales tax must be taken into account in the annual sales tax return. This also applies to the special advance payments. So:
- Sales tax less
- The pricier results
- VAT burden
The calculation continues as follows:
- VAT payable less
- Sales tax prepayments result in the
- Sales tax final payment
As a rule, no final sales tax payments are necessary if the sales tax advance notification has always been made and not corrected afterwards. This is because all payments have already been made as part of the VAT advance payments.
The pre-registration period – what is it anyway?
The pre-registration period has just been briefly mentioned. This should be discussed in more detail here: The pre-registration period is the period of time for which an entrepreneur submits the sales tax pre-registration . The time period is either a quarter, i.e. a quarter of a year, or a month, sometimes a year.
Anyone who, as an entrepreneur, has sales that are subject to VAT must therefore regularly submit advance VAT returns for a predetermined period of time. This period is the so-called pre-registration period. Which period, whether monthly, after a quarter or once a year, applies to the entrepreneur, depends on the amount of sales tax that had to be paid to the tax office in the previous year. The pre-registration period is greater, the less sales tax it was. This is also the reason why small business owners do not have to submit a sales tax return. In each case in the letter from the tax office it is stated which period is valid for the respective entrepreneur and whether or when this changes.
Pre-registration period of one month
If the sales tax liability was more than 7500 euros in the previous year, the pre-registration period is one month. It should be noted that founders generally have to submit their sales tax return on a monthly basis until the first complete financial year has been completed. Only then can the tax office correctly classify the company.
Pre-registration period of three months
If a company had to pay EUR 1000 to EUR 7500 sales tax in the previous year, the quarterly pre-registration period applies. In this case, most of them include freelancers as well as sole proprietorships.
Pre-registration period of one year
Consequently, all entrepreneurs who had to pay less than 1000 euros in sales tax in the previous year have an annual pre-registration period. If you take it very strictly, a year is not a pre-registration period because it is necessary to prepare an annual sales tax return every year. So it is the tax return for the sales tax. In this way, the annual VAT return covers the same period as the annual return does. Then the annual declaration is sufficient so that the pre-registration does not have to be submitted.
The deadline for submitting the VAT advance return
The sales tax pre-registration must be submitted within ten days after the pre-registration period has expired. The pre-registration for May 2016 must be submitted to the tax office by June 10, 2016. The deadline can be postponed by one month via the permanent extension .
Annual sales tax returns and the deadlines
An annual sales tax return must always be submitted by May 31. of the following year. If, for example, it is the sales tax return for 2015, it must be submitted by May 31, 2016. There is the term of permanent extension, but this is not valid for the annual sales tax return. It is different with a general extension of the deadline, this can be requested. In addition, tax advisors have until the end of the following year.
What is a permanent extension?
Now the term permanent extension was used. This should also be dealt with briefly once; As the name suggests, a permanent extension is an extension of the deadline. This makes it possible for companies to submit their advance VAT return one month later than they should actually be.
Permanent extension of the term and its effects
As already mentioned, the advance VAT return must be submitted for a certain period of time. Whenever the pre-registration period has expired, the entrepreneur still has ten days before he has to submit the pre-registration to the tax office. It is therefore a relatively short period, which is why there is a permanent period extension. This gives the entrepreneur an extra month.
The conditions for the permanent extension
If the tax office comes a little closer to the entrepreneur with the permanent extension, he must make a special advance payment as security. This is due at the beginning of the year when the monthly VAT return is submitted. As soon as the entrepreneur only has to prepare the VAT return once a quarter, no special advance payment is necessary. This security payment amounts to 1/11 of all advance VAT returns from the previous year. You can easily apply for a permanent extension on the Internet.
Conclusion: annual sales tax declaration
The concept of the annual sales tax declaration is first of all a huge one, behind which there seems to be a lot. In fact, the situation is nowhere near as complicated as one might think at first glance. The annual sales tax return is nothing else than the sales tax return. This must include all income, expenses and advance sales tax payments. Even if you are a small business owner, you have to make an annual sales tax return, although you are not obliged to submit sales tax returns.
Much more complicated are the terms that entwined around the annual sales tax return. There is, for example, the concept of the pre-registration period and the permanent extension of the period. Because only very few people are aware of these, they were discussed again in particular. This post should have answered many questions about the topic of annual sales tax returns.