Tax returns – Which have to be submitted by freelancers and sole traders?
Independent professionals and sole proprietorships – income tax, VAT and trade tax
The income of sole proprietorships and independent professionals is declared in the income tax return. The profits are shown based on payment transactions as the difference between revenues and expenditures in a cash basis accounting. The correct income and expenditure amounts must be calculated and entered in the correct boxes in annex “EÜR” of the income tax returns. We know the complexities involved in income tax returns and declarations and can provide support to your company.
Trade tax must be paid, if the taxpayer carries on a trade in Germany. Independent professionals such as lawyers, notaries, architects, or doctors in private practice are generally exempt from trade tax. The distinction between trade activity and independent professional activity can sometimes be difficult and requires an expert.
Basically, all sole proprietors and independent professionals must file VAT returns. This is also applicable for small companies with turnover of less than €17,500 in the previous year and an estimated turnover not exceeding €50,000 in the current year.
Do you need advice in this regard? Here you can find out how we can assist you.
Which tax returns have to be submitted by corporations or partnerships?