If you are self-employed and entitled to sales tax, then you collect an invoice amount from your customers that include input tax. You have to pay this tax to the tax office later. In return, you will be reimbursed the VAT on business-related expenses from the tax office. In some cases there may be an input tax surplus, which is of course positive.
The input tax surplus makes you money
Not every self-employed person is entitled to sales tax
If you have become self-employed, then, depending on the turnover, you are either exempt from sales tax or a small business owner or you have to collect input tax and pay it to the tax office if the turnover is higher. While this is more work for you, it also has some advantages. If a customer pays you an invoice, 19 percent VAT is added to this amount. All these taxes end up in your business account, but have to be paid to the tax office in good time. Make use of the tax app to decide the right amount.
Electronic billing can be created relatively quickly and easily using the software (the basic version is free of charge). After each month you compare the input tax and sales tax amounts and offset them against each other. You get the tax back from the tax office on business-related expenses, which unfortunately you cannot do as a small business owner. In certain cases there can even be an input tax surplus, and in this special case taxes on expenditure are higher than taxes on income.
What an input tax surplus means in detail
If you receive less input tax than you paid sales tax in a business month, this is a special case and this is called the input tax surplus. You do not have to pay money to the tax office, but get money from the tax office, which actually doesn’t happen too often. You do not have to transfer any money to the tax office after the business month, but you also have to use the software to do your tax return.
The tax office will transfer the amount of the input tax surplus to your account within a few days. Too often you shouldn’t be affected by this special case, because otherwise the tax office could still assume that your business is a bogus self-employment and ask unpleasant questions.
As a self-employed person, you can only decide freely in a few cases whether you would like to be subject to VAT or not. In principle, you are subject to sales tax. The small business regulation allows you an exception. You are not allowed to charge VAT here. You also do not need to submit a VAT return.