How the Services For Sales Tax Matters A Lot


For certain services (e.g. construction work and property deliveries) the reverse tax liability applies (reversal of tax liability). In this case, the service provider is no longer obliged to withhold and pay (to the tax office) the sales tax. Rather, the recipient of the service must pay the sales tax directly to the tax office. Since 2006, the reversal of tax liability has also been applied to building cleaning services.

The Sales Tax Solutions

The debtor of the sales tax is Entrepreneur or the acquirer in the case of intra-community acquisition or the buyer of a delivery or other service, if the entrepreneur has treated a delivery as tax-free due to incorrect information provided by the buyer, or the issuer of an invoice in which a tax amount is shown separately, although the issuer of the invoice is not entitled to show the tax amount separately (this is the case, for example, in private sales transactions, the issuer of the invoice is not allowed to show sales tax) or the last buyer in an intra-community triangular transaction. The use of the sales tax calculator happens to be important in calculation.

With the Surprises

Surprisingly, they came, the reduction of the sales tax often tax called. The sales tax reduction was decided by the federal cabinet on June 12th, 2020 and came into force on July 1st, 2020 through the Second Corona Tax Aid Act. At this point in time, the sales tax rate or VAT rate was reduced from 19% to 16% and the reduced rate from 7% to 5%. The goal of the “VAT reduction”: to strengthen consumption and to stimulate the economy in the corona crisis.

Unfortunately, the tax cut is not as easy as it appears at first glance and poses a number of challenges for many self-employed, traders and traders because even after the change in VAT on July 1, 2020, there are various points to be observed.

  • On what services the sales tax cut and VAT reduction affect?
  • What needs to be taken into account for partial and long-term services?
  • What do you have to consider when paying down payments?
  • What special regulations apply to vouchers, exchanges and annual bonuses , for example?
  • What are the special features of actual taxation?

With our current e-book, we support you in all matters relating to sales tax or sales tax reductions and also provide an outlook on the sales tax increase on January 1, 2021.

What about the old-age relief amount?

The age relief amount applies to additional income and is automatically taken into account by the tax office. Additional income that is less than 410 euros remains tax-free. In order to receive this tax advantage, however, you do not have to earn exactly € 410 in old age, because you are entitled to the old-age relief amount that is deducted from the additional income. If you then fall below 410 euros, no taxes are payable.

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