Field help:
(2022)
Operating income exempt from VAT
Please specify the operating income which is either exempt from VAT or is not VAT-taxable as listed in sect. 4 Value Added Tax Act (UStG):
- Exempt from VAT according to sect. 4 Value Added Tax Act (UStG) are, for example, interest, rental income and the services of doctors, dentists, naturopaths (qualified as Heilpraktiker), physiotherapists, midwives, insurance representatives and brokers, representatives of building societies, credit brokers, voluntary workers for a public corporation.
- Not VAT-taxable are, for example, foreign turnover, income as compensation, from insurance benefits, compensation, reminder fees received and interest on arrears, public subsidies such as forest subsidies, subsidies for land consolidation or other subsidies.
Furthermore, operating income with reverse tax liability (sect. 13b Value Added Tax Act (UStG)) for which the recipient of the service owes the VAT due to the so-called reversal of tax liability (sect. 13b Value Added Tax Act (UStG)) must be specified here. In this case, as a service provider, you do not have to pay the VAT to the tax office and are therefore not allowed to show it in your invoice to the client. The reverse charge applies to the following services:
- Services which are subject to the Land Transfer Tax Law (Grunderwerbssteuergesetz), in particular
- Sale of developed and undeveloped land,
- Ordering and transfer of heritable building rights,
- Transfer of co-ownership shares in a property,
- Delivery of buildings erected on third-party land after the end of the rental or lease period (ground lease).
- Construction services that you perform for another contractor, i.e. for work deliveries and other services that serve the production, repair, maintenance, modification or removal of buildings. The reversal of tax liability only applies to companies in the construction sector, i.e. to tradespeople and companies that provide construction services themselves. The obligation to pay also exists if such companies purchase services for their private use.
A reversed tax liability has existed for a longer time for entrepreneurs and legal entities under public law as recipients of services of
- Work supplies and other services of an entrepreneur domiciled abroad.
- Deliveries of objects assigned as collateral by the collateral provider to the secured party
outside of insolvency proceedings.
For example, as a German entrepreneur you owe VAT for the services provided by "Google" in connection with the so-called "Adwords" campaigns.
