News Kanzlei Beißwenger
Lecturer at the advanced training course for assistant tax consultants 2019 in Karlsruhe, Germany
- Course 01 (in German)
Value added tax (VAT)
Dates for 2019 will be published soon
- Course 02 (in German)
Value added tax (VAT)
Dates for 2019 will be published soon
Held by the "Kolleg für Wirtschaft und Steuern GmbH" in Karlsruhe.
Tax declaration: Yes, or No?
If one of the following points applies to you, you are legally obliged to file a tax declaration.
During the previous year you earned not only a salary but also wage-replacement benefits
(i.e. short-time allowance, unemployment allowance or parental allowance) that are higher than 410,00 EUR
For the tax deduction an additional tax exempt amount for higher professional expenses has been considered
There is a second work relationship with tax code VI
Spouses or partners taxed with tax classes III/V or IV + factor
If you don’t earn a salary but have an income from pensions or from rent and lease or if you are an independent professional, you must only verify if the total amount of your income does not exceed the tax exempt subsistence level. For the years 2017 and 2018 this level amounts to 8,820.00 EUR respectively 9,000.00 EUR for a single adult and 14,856.00 EUR for a couple. If this amount is not exceeded, a tax declaration is not necessary.
The delay for the filing of a self-filled in tax declaration is end of May of the following year (from the assessment year 2018 it is end of July 2019). If a tax consultant files your tax declaration, the delay is December 31 of the following year (from the assessment year 2018 it is end of February 2020, i.e. in conformity with $ 149, article 3 of the German tax code: the last day of the month of February of the second following year).
Numerous tax payers give away money year after year, but a voluntary tax declaration can be beneficial. And it is not true that the voluntary filing of a tax declaration leads to a permanent mandatory filing. The delay of a voluntary tax declaration is the end of the fourth year after the assessment year.
The European Union and Taxation
The kinds of taxes each country of the European Union raises and the setting of tax rates depend on the national legislation of each Member State. The national government decides, not the EU.
The role of the EU is to oversee national tax rules, to ensure they are consistent with the EU policies, such as:
- Promoting economic growth and job creation
- Ensuring the free flow of goods, services and capital around the EU (in the single market)
- Making sure there is no unfair advantage
- Ensuring that there is no discrimination in taxation
EU decisions on tax matters require unanimous agreement by all member governments. This ensures that the interests of every single EU country are taken into account.
VAT and excise duties
For some taxes, such as VAT or excise duties (taxes on petrol, tobacco and alcohol), all 28 national governments have agreed to broadly align their rules and minimum rates, to avoid distorting competition across borders within the EU;
Corporate and income tax
For these taxes, the EU’s role is to ensure that principles such as non-discrimination and free movement in the single market are followed.
The EU has no say in how countries spend their tax revenues. However, due to globalisation, countries that go into too much debt may jeopardise growth in other EU countries and undermine the stability of the Eurozone.
To minimise this risk, EU countries try to coordinate their economic policies closely and to make tax policies fairer, more efficient and more growth-friendly (see for example: treaties to eliminate double taxation),
Standardised taxation of goods and services
EU countries have agreed to align their rules for taxing goods and services, in order to make it easier for goods and services to be traded across borders within the EU and avoid competitive distortions.
Fair taxation across borders
The tax laws of one country should not allow people to escape taxation in another country.
The EU elaborates:
- Rules on information exchange between EU countries and their tax administrations
- A quick reaction mechanism to combat VAT fraud
- A common system for taxing financial transaction
The new data protection: Processing in the employment context
On May 25, 2018 the new § 26 Bundesdatenschutzgesetz (BDSG) (Federal Data Protection Law), which regulates the processing of data for the purposes of an employment relationship, comes into force.
The new data protection for employees must be put into practice by the employers as well as by superiors, representatives or providers.
Personal data of employees may be processed for the purposes of an employment relationship if this is necessary for the foundation, the performance or termination of an employment relationship or for the execution of rights and obligations from works agreements (i.e. planning and organization of work).
The employee may consent to the processing of the personal data. It is of utmost importance that the consent is given freely and in written form.
The controller must take appropriate steps to ensure that the principles relating to the processing of personal data laid down in Article 5, Directive (EU) 2016/679 are complied with (the processing in conformity with lawfulness, fairness and transparency).
The employee must be informed about the purpose of the data processing as well as about his/her right to withdraw the consent according to Article 7, no. 3 of the Directive (EU) 2016/679.
EU – Company Law: Harmonised rules on cross-border moving, merging and dividing of companies
In the EU Single Market, companies have the freedom to move and grow. Currently, national rules differ greatly between Member States and generate excessive administrative hurdles and high costs, which prevent companies from looking for business opportunities abroad.
The European Commission has proposed new company law rules that will make it easier for companies to merge, divide or move within the single market.
The clear procedures enable businesses to move or reorganise within the single market without unnecessary legal complexities and at a lower cost, in particular by making digital solutions available for the registration, the filing of documents or information throughout a company’s lifecycle.
The new rules will enable companies to register online, to set up new branches or to file documents to the business register online. Going digital will make the process of setting up a business more efficient and cost effective.
Important: The new rules will also ensure that employees’ rights are well protected. At the same time, they include effective safeguards against abusive arrangements to circumvent tax rules or jeopardise creditors’ interests; the national authorities will be able to rely on each other’s information and more information about companies will be available free of charge in the business registers.
The aim of the new rules is to make it easier and less expensive for companies to merge, divide or move within the single market and thus stimulate the growth potential of European companies.
Baukindergeld – A government grant scheme to support families building homes
The government coalition of SPD und CDU/CSU envisages the implementation of a so called “Baukindergeld” - a grant scheme for young families to build or buy homes of their own.
Who is entitled to this help-to-build/buy subsidy?
Families with children who want to purchase a home of their own by either building a new home or buying already existing housing.
The taxable household income per year must not exceed EUR 75,000, plus an extra allowance of EUR 15,000 per child
Example: A family with two children
Household income: EUR 75,000
allowance 1st child: EUR 15,000
allowance 2nd child: EUR 15,000
max. income EUR 105,000
What is the amount paid?
The subsidy will amount to EUR 1,200 per child per year payable for ten years.
Example: A family with two children
subsidy for 1st child: EUR 1,200 per year x 10 years = EUR 12,000
subsidy for 2nd child:EUR 1,200 per year x 10 years = EUR 12,000
max. subsidy EUR 24,000
The age of the children is not relevant, but it is probable that the subsidy will be paid similar to the child allowance till the age of 25 years.
When will the help-to-build/buy subsidy be available?
The grant scheme is mentioned in the coalition agreement and must first pass all legislative procedures. The implementation may be in 2018 or last longer, till 2019 or beyond.
Where can you apply for the help-to-build/buy subsidy?
This is not yet clear. The decision of the legislator will clarify the issue.
When will the grant scheme become effective?
This is not yet certain either. The legislator may probably fix a deadline for the building/purchasing project from which on the grant scheme will become effective. Retroactive applications are rather improbable.
Advantages and disadvantages of the government grant scheme
The help-to-build/buy subsidy is highly controversial.
The supporters outline several advantages:
- affordable housing for young families
- instrument against poverty in old age
- demand increases in cheaper, i.e. rural areas
The opponents outline many disadvantages:
- there is no social justice, as low-income families with children who have no asset and
therefore cannot afford to buy housing of their own do not profit from this government grant
- due to this grant scheme the demand for building sites will increase and therefore the real
estate prices will increase equally. Thus the intended impact of the help-to-build/buy subsidy
will be neutralized.
- only families who would build/buy anyway profit from this grant scheme and this leads to
- there will be no additional building in large cities with severe housing shortage
- the help-to-build/buy subsidy must be supported by several additional measures (e.g.
reduction of the real estate transfer tax, reduction of the notary and broker’s fees,
government guarantee schemes) in order to reach the desired effect: increase the
homeownership rates among families with children.
We will keep you updated.
Company Pension Act
The new reinforcement law of the company pension act came into force on January 1, 2018.
What is important for you as an employer? What should you consider? What must you know?
The new regulations render the company pension attractive even for small and medium size businesses and their employees as well as for low-wage earners.
Advantages for your company
The defined benefits make your company attractive both for new and existing employees and thus lowers the personnel fluctuation and ensuing costs
Your contributions to the company pension lower your taxable benefits and thus you save taxes
Part of the contributions are tax exempt and thus you lower your non-wage labor costs
Your company only confirms the payment of a defined benefit, not the payout amount of the pension and thus is exempted from liability
Your company may receive a government grant for up to 30 % of the contributions for low-wage earners
Advantages for your employees
Each employee has a legal right to a company pension by remuneration conversion
Each employee may transfer his company pension entitlement to a new employer
The accumulated capital is protected against third party access
Each employee has the possibility to convert part of his remuneration in contributions to the company pension that are free of taxes
Maximum amount of contributions per year payable in 2018
exempt of income tax: 6.240,00 €
exempt of contributions: 3.120,00 €
Modalities of implementation of the company pension
The employer and employee may decide upon the most suitable solution.
Modalities of payment of the company pension
Employee’s contributions (without conversion)
Employer’s contributions (instead of wage increase)
Important to know: The amount paid out is subject to full taxation.
Reform of the VAT system for intra-EU transactions in goods
The European Commission presented its proposal for a directive for the reformation of the value added tax system for the taxation of trade between Member States on October 4, 2017.
The goal is to simplify and to harmonize the value added tax system in place for the trade between Member States by the taxation in the Member State where the goods arrive (country of destination)
The value added tax system presently in operation for the intra-Community transactions in goods has been in place since 1993 and was originally intended to be a transitional arrangement. The system is fragmented and not adapted to the technological progress of today. Its 2-step-structure also increases the opportunity for fraud.
A cross-border movement of goods from one Member State (country of departure) to another Member State (country of destination) is split into two transactions:
In the country of departure: exempt supply
In the country of destination: taxable acquisition
If the acquirer of the goods does not declare the shipment, there is a loss in tax revenue.
The present tax system is complex, causes high compliance costs, is legally uncertain and is not favorable to cross-border trade.
The envisaged reform shall be implemented in two steps:
Implementation of a single transaction taxable in the Member State of destination:
The principle of “taxation in the Member State of origin” of the supply of goods or services should be replaced by the principle of “taxation in the Member State of destination”.
-the supplier is the taxpayer
-the control location is the country of destination
-the tax liability may be transferred to the buyer if he is a Certified Taxable Person (CTP)
Evaluation period: five years after entry into force.
In the second step the supplier will become the sole tax debtor
The new definitive VAT system for intra-Union trade should be in place by 2022.
On January 1, 2019 the first amendments shall already become effective:
- it is a just-in-time production
- the acquirer is known
- the supplier and the acquirer are Certified Taxable Persons
- the supply of goods is treated like a direct intra-Community supply
- The registration of the supplier in another Member State is not required
VAT identification number
- the taxable person acquiring the goods is registered in another Member State than the country of departure
- The VAT identification number and its registration with VIES (VAT Information Exchange Service) are material prerequisites for the application of the exemption of an intra-Community supply of goods.
Chain transactions (including triangular transactions)
- the vendor and the acquirer are Certified Taxable Persons
- the intermediary communicates the country of destination
- the intermediary is registered in another Member State than the country of departure
- the shipment of goods from the vendor to the intermediary is the sole tax-relevant shipment
Important to know:
Very important for the traders involved in intra-Union cross-border trade is their status as Certified Taxable Person.
The European Commission will elaborate within its work program all rules, directives and legislative proposals for the implementation of a simple, secure and less sensitive to fraud definitive VAT system for the taxation of intra-Union trade
We will keep you up-dated.