Advance VAT Return: Who Qualifies and What You Get
Learn how to manage your monthly or quarterly VAT reporting and avoid late fees in Germany.
The Advance VAT Return is a method for businesses to report the value-added tax they have collected from customers compared to the tax they have paid on business expenses.
Who it's for
This is for businesses that do not qualify as "small businesses" under the tax exemption rules, or those who have specifically chosen to opt out of that exemption.
What you get
By using this scheme, you can report your VAT on a regular basis, either every month or every three months. This allows you to track the difference between the tax you collected and the tax you paid, which helps in managing your business's tax obligations.
What it costs you
While there is no direct fee to file, this process requires strict adherence to deadlines. You must submit your reports by the 10th of the following month. If you miss these dates, you may be charged late fees by the tax office.
The catch to know
Even if your business had no income during a specific reporting period, you still have to file. Forgetting to submit a "zero" return when no transactions occurred is a common mistake that can lead to issues.
How to apply
- Determine if your business size or tax status requires monthly or quarterly reporting.
- Gather your records for tax collected and tax paid during the period.
- Submit your report through the official tax portal by the required deadline.
- Keep all your receipts to support the figures in your filing.