Date of tax liability accrual

General information

A distinction is made between the imputed taxation ("Taxation after agreed charges", first sentence of section 19 paragraph 2 (1a) of the Umsatzsteuergesetz – UStG) and the actual taxation ("Taxation after collected charges," section 17 paragraphs 1 and 2 of the UStG).

Imputed taxation

Imputed taxation is the most common. Services provided in one month form the basis. Tax liability arises at the end of the month in which the delivery or other service took place. For accounting in a later month, tax liability accrual is postponed by no more than one month.

Where an entrepreneur, who may also be a foreign entrepreneur, performs a service or works delivery within the country and transfers the tax liability to the recipient of the service, tax liability accrues at the end of the month in which the service in question was provided. Postponement by another month as a result of later accounting is not possible in this case.

It is entirely possible that VAT must be paid to the tax office even where the business partner in question still owes the invoice amount.

Caution

A distinction must be made between the accrual of tax liability and its due date, i.e. the latest point in time by which the tax must be paid.
The VAT must be paid on the 15th day of the second month following the expiry of the reporting period – which can be a month or a quarter.

Example

Delivery Accounting Accrual of tax liability Tax due on
10 July 10 July End of July 15 September
10 July 4 October End of August 15 October

Actual taxation

In this case, tax liability arises at the end of the month in which payment is made, irrespective of the time of delivery or other service or accounting. This also applies to advance payments.

This manner of taxation is intended for:

  • farmers and forest managers who are not required to keep accounts and traders, as well as
  • freelancers (irrespective of their turnover amount and legal form*),
  • energy generation and waste disposal entrepreneurs and
  • all other entrepreneurs (e.g. landlords), whose total income in one of the previous two years does not exceed 110,000 Euro.

Upon request, imputed taxation can also be chosen instead of actual taxation.

Legal basis

Sections 17 and 19 of the Umsatzsteuergesetz (UStG)

Translated by the European Commission
Last update: 1 January 2021

Responsible for the content: Federal Ministry of Finance

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