How can I tell if I have opted for value added tax?
May 16, 2022 | 55,00 EUR | answered by Oliver Götzinger
Dear tax advisor,
I have a question regarding value added tax and hope that you can help me. My name is Wolfgang Krebs and I operate a small business in the online trading sector. So far, I have always been exempt from VAT as my annual turnover was below the threshold. However, I am now considering whether it would be beneficial to opt for VAT.
My current situation is as follows: My turnover has steadily increased in recent years and I plan to further expand my business. This raises the question of whether it would be tax advantageous to opt for VAT. I am wondering if this could potentially allow me to claim more input tax deduction and if it would have a positive overall impact on my financial situation.
My concerns mainly lie in the fact that I am not sure how to determine whether I have already opted for VAT or not. I have been managing my own accounting so far and I am not certain if I have correctly implemented all relevant regulations and rules. Therefore, it would be important for me to know how I can determine whether I have opted for VAT and what steps I would need to take if I choose this option.
Could you please explain to me specifically how I can find out if I have already opted for VAT and how I can potentially take this step if necessary? I would be very grateful for your support and expertise in this matter.
Thank you in advance.
Kind regards,
Wolfgang Krebs
Dear Mr. Krebs,
Thank you for your question regarding value-added tax and your consideration to opt for VAT. I would be happy to help you make the best decision for you.
Firstly, regarding whether you have already opted for VAT or not, you can usually determine this based on your VAT identification number (VAT ID). If you have such a number, it means you have opted for VAT. If you do not have a VAT ID, you are most likely exempt from VAT. In this case, you must have opted for the small business scheme to be exempt from VAT.
If you now wish to opt for VAT, you must submit an application for standard taxation to your local tax office. This application is informal and can be submitted in writing. Once your application is approved, you are required to pay VAT and can claim input tax deductions accordingly.
Regarding your question about whether it would be financially advantageous to opt for VAT, I can tell you that this depends on various factors. If you have many expenses for which you can claim input tax, it may indeed be beneficial to opt for VAT. Through input tax deductions, you can lower your costs and increase your profits. However, you must also consider that you will then have to pay VAT to the tax office, which can affect your liquidity.
It would be advisable to conduct a detailed analysis of your current situation and possibly speak with a tax advisor to make an informed decision. I am also available for a personal consultation.
I hope that this information has been helpful to you and I am available to answer any further questions you may have.
Best regards,
Oliver Götzinger
Tax Advisor
