Not paying Umsatzsteuer in Germany - how to bill?
Thread poster: klghemil ghseil
klghemil ghseil
Equatorial Guinea
Local time: 00:30
Oct 14, 2004

Hello,
sorry if this has been covered before, I couldnt find the information in the archives.
I have some related questions.
Firstly, I live in Berlin and have recently gone freelance (Ich-AG). I was told that as I earn less than 25.000 Euro a year (and don't intend to earn any more) I am not umsatzsteuerpflichtig. So I have of course not been adding the 16% to bills, but now a client wants me to confirm on my invoice that I am not umsatzsteuerpflichtig according to article whatever. Can anybody please tell me what this article is and what the standard thing to write is?
Also, although I don't pay Umsatzsteuer cos I don't earn enough, I have heard that I have to charge it for customers from the Uk. If this is true, how do I get an Umsatzsteuernumber (already have a normal one) and do I then HAVE to charge my German customers Mwtsteuer too?
Thanks for any advice
Jenny Hackney


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Sonja Tomaskovic  Identity Verified
Germany
Local time: 00:30
English to German
+ ...
Kleinunternehmerregelung Oct 14, 2004

Hi Jenny,

you have to add something like:

"Gemäß §19 UstG. wird keine Ust. erhoben."

or similar. I am not sure whether there is a standard expression.

AFAIK, you don't charge any of your customers VAT - not matter where they are located.
Note that once you start charging VAT, your local tax office will assume that you are "umsatzsteuerpflichtig" and will claim VAT for all the money you have earned so far. Usually clients will not have much understanding and you might end up paying it out of your own pocket.

HTH.

Kindly,

Sonja


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Korina Hansel  Identity Verified
Local time: 00:30
English to German
Advisable to charge Umsatzsteuer Oct 14, 2004

Hi Jenny,

The thing is that as a Freiberufler who is not going to earn more than 25.000 Euro (actually 24.500 Euro) it is up to you to decide whether to charge Umsatzsteuer or not. It is advisable though because some clients, especially within the EU, require you to charge Umsatzsteuer (I do not know about the UK though).
If you want to charge Ust you will need the Umsatzsteuernummer but once you have one you will always have to charge Ust, as long as you are Selbständig. If you do not have this number you are not allowed to charge Ust - obviously;)

Besides these facts, why don\'t you get that number and charge Ust? You will probably have some more clients because when they are paying you Ust (VAT) they can deduct it from their taxes. I am sure someone out there can explain the details behind that more clearly than I could
Of cause this means much more paperwork for you!


Good luck,

Korina


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Ralf Lemster  Identity Verified
Germany
Local time: 00:30
English to German
+ ...
Clarifying a few issues... Oct 14, 2004

Hi Jenny,
First of all, if you don't want to (or are unable to) consult a tax advisor, you can always ask your local Finanzamt. Your local IHK should also be able to help you.

sorry if this has been covered before, I couldnt find the information in the archives.

Use the forum search function, using "Kleinunternehmer" as a search criterion. You may want to start with this thread; this one also contains useful information.

Also, although I don't pay Umsatzsteuer cos I don't earn enough, I have heard that I have to charge it for customers from the Uk.

Who told you that?

If this is true, how do I get an Umsatzsteuernumber (already have a normal one) and do I then HAVE to charge my German customers Mwtsteuer too?

You can only get a VAT registration number if you're registered for VAT (Umsatzsteuer); once you do that, you will have to charge German customers VAT (whereas there's no VAT to UK customers who are also registered for VAT, as evidenced by their VAT ID).

Regarding Korina's posting:
It is advisable though because some clients, especially within the EU, require you to charge Umsatzsteuer (I do not know about the UK though).

...and why would they do that?

You will probably have some more clients because when they are paying you Ust (VAT) they can deduct it from their taxes.

Sorry, but this doesn't make sense.
It's true that, for a VAT-registered freelancer or business, VAT paid on business expenses (input tax - Vorsteuer) can be set off against their VAT liability (not against their income tax) - if they don't pay VAT in the first place, there's nothing to set off, of course. But in essence, the calculation basis for a VAT-registered business is the net price, exclusive of VAT. In other words: whether or not you charge VAT shouldn't make a difference to your customer.

HTH, Ralf


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Carsten Mohr  Identity Verified
Germany
Local time: 00:30
Member (2007)
Italian to German
+ ...
this might help Oct 15, 2004

Dervlaann wrote:

Hello,
sorry if this has been covered before, I couldnt find the information in the archives.
I have some related questions.
Firstly, I live in Berlin and have recently gone freelance (Ich-AG). I was told that as I earn less than 25.000 Euro a year (and don't intend to earn any more) I am not umsatzsteuerpflichtig. So I have of course not been adding the 16% to bills, but now a client wants me to confirm on my invoice that I am not umsatzsteuerpflichtig according to article whatever. Can anybody please tell me what this article is and what the standard thing to write is?
Also, although I don't pay Umsatzsteuer cos I don't earn enough, I have heard that I have to charge it for customers from the Uk. If this is true, how do I get an Umsatzsteuernumber (already have a normal one) and do I then HAVE to charge my German customers Mwtsteuer too?
Thanks for any advice
Jenny Hackney


>>>>>
Hello,

the reference is article 19 of the Umsatzsteuergesetz:
http://bundesrecht.juris.de/bundesrecht/ustg_1980/index.html but check the limit!

A standard sentence might be: Gemäß §19 UStG erhebe ich keine Umsatzsteuer / bin ich nicht USt-pflichtig.

As far as I know, you have to stick to the USt-Gesetze of the country you live in. So since you don't have to charge MwSt. in Germany, you don't have to charge it in the UK either - that's what I think. Further reference:
http://www.adue-nord.de/archiv/umsatzsteuer.pdf

I guess that's it. Feel free to contact me for further questions!


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klghemil ghseil
Equatorial Guinea
Local time: 00:30
TOPIC STARTER
Thanks... Nov 16, 2004

very much for your help everybody, I think I'm starting to get my head round it!
Cheers,
Jenny


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xxxHirschmann  Identity Verified
Local time: 00:30
English to German
+ ...
Get an UID and you're in gear! Nov 26, 2004

Just ask for an Umsatzsteuer-Identifikationsnummer (http://www.bff-online.de/ust/useg/UST_IdNr_.html):

"1.3 Wie ist eine USt-IdNr. zu beantragen?

Für den schriftlichen Antrag ist keine bestimmte Form vorgeschrieben. Es sind

- Name und Anschrift des Antragstellers
- Finanzamt, das für die Umsatzbesteuerung zuständig ist,
- Steuernummer, unter der der Antragsteller umsatzsteuerlich geführt wird.

anzugeben.

Der Antrag ist an das Bundesamt für Finanzen, Außenstelle Saarlouis, 66738 Saarlouis (Telefax: 0 68 31 - 456 120) zu richten."

After receipt of your UID, you have to indicate it on all of your invoices, and the UID of the respective client, too.

All your clients in Germany will have to be invoiced with 16 % of Mehrwertsteuer added to the net amount whereas your foreign clients will not, except those who don't have an UID themselves.

Furthermore, you will have to send your Finanzamt a monthly Umsatzsteuervoranmeldung (this can be done electronically through the Internet - refer to https://www.elster.de/ssl/elfo/main-anw-form-down-03.htm).

You can deduct all Mehrwertsteuer amounts you have paid when buying goods or services required for your work from the Mehrwertsteuer obtained from your German clients. Ask your tax consultant for further details.


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