How does the sales tax get to the tax office?

Only companies that are subject to sales tax are obliged to show the sales tax for their goods and services when invoicing and to pass the sales tax collected on to the tax office. Accordingly, it is not the consumer of the products that pays the sales tax to the tax office, but the company that sells the service or goods. It is important to understand that the company is not negatively burdened with this tax burden.

On the contrary:

Sales tax is a transitory item for companies. This means that the VAT arrives as a monetary amount on the company account and is forwarded in the same amount to the tax office of the company. However, there is one special feature here: the company collects the tax amount, but also pays sales tax to third parties for the purchase of goods itself. The company can offset this VAT paid against the VAT received. Conversely, this means that the company does not pass on the tax amount to the tax office in the same amount, but possibly a lower amount. 

It can be stated that the company acts as an intermediary between the end customer and the tax office and forwards the sales tax. In this constellation, however, the company is subject to obligations and is required to regularly declare the sales tax received to the tax office. For this purpose, the company submits a monthly or quarterly VAT return in a specific time cycle. In addition, the company is obliged to submit an annual VAT return. This lists the generated sales, input tax paid and advance tax payments and explains them to the tax office. As you go for the calculate sales tax  you can expect more now.

Example: Sales tax is passed on to the tax office in the same amount 

You sell tennis shoes through Amazon. A customer buys a pair for a value of 119 EUR. This price is a gross price including 19 VAT. The customer transfers the amount to your company account. Of this, you can post 100 EUR as sales and 19 EUR as sales tax. You have to pay the same amount of 19 EUR to the tax office.

Example: Set off sales tax and input tax

Following on from the example presented, you sell tennis shoes as an entrepreneur. So far you have sold a pair of shoes and received EUR 100 net sales and EUR 19 sales tax. In order to stand out from your competitors, you decide to individualize your packaging tape. 


To do this, you commission a company that will produce a new packaging tape for you and will issue you an invoice with a gross invoice amount of EUR 35.70 including VAT. Accordingly, you pay sales tax of EUR 5.70 to your supplier. Now comes the crux of the matter: You can reduce the EUR 19 you owe the tax office by EUR 5.70 input tax. As a result, you only have to pay 13.30 EUR to the tax office. 


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