Tax return and declaration duties
Tax return and declaration duties of the entrepreneurs
An entrepreneur is legally obliged to keep accounts. The fiscal determination of profits is, on principle, conducted by way of operating assets comparison. In deviation of this, persons with income from independent personal services and persons running a business with little turnover or profit may determine their operating result by way of comparison of revenue and expenses (so-called net income method).
The tax office determines advance tax payments for the income and corporation tax by advance tax payment notice. The advance payments in the case of a new establishment are based on the information provided by the entrepreneur within the scope of issue of the tax number and with current operations on principle corresponding with the tax which resulted for the last assessment after credit of tax deduction amounts and the corporation tax. In the case of changes, an adjustment of the advance payment amount to the actual course of business may be applied for.
The dates for the income and corporation tax advance payments are, on principle, 10 March, 10 June, 10 September und 10 December of a year. Deviating dates may be agreed with the responsible tax office in justified individual cases.
Dependent on the amount of turnover, the value-added tax must be reported and paid to the responsible tax office on a monthly, quarterly or annual basis. The self-calculated amounts are also due on the 10th of the respective reporting month.
The assessing tax office must have the tax return of the actually achieved profit and the turnover for the previous year available by 31 May of each calendar year. In justified cases, a later hand-in date may be agreed with the tax office.
Statistical reports must be given graduated according to the size of the undertaking (see www.destatis.de).
Tax return and declaration duties of the employers
Employees are always taxed at the source , i.e. they receive their monthly salary on principle only after deduction of PAYE tax, solidarity surcharge and any church tax, as well as social security contributions (see www.deutsche-sozialversicherung.de).
The employer has to pay the PAYE tax of all employees in one sum at certain due dates (monthly, quarterly or annually) to the tax office responsible for the business. The employer must hand in a PAYE tax return (regularly through electronic transfer) in which only the total amount of the retained PAYE tax must be declared; further information about the engaged employees to which the paid PAYE tax refers are not demanded.
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