Sales tax reduction as of July 1: What to watch out for?

As of 01.07.2020, the sales tax will be reduced. But, what do I need to pay attention to when I bill? While the baker around the corner may just need to change a setting in his POS system and pay a little attention in his bookkeeping, there are numerous more complicated cases where you need to pay attention

• The most important of these are continuing obligations and ongoing services. Here, invoices may need to be adjusted, time periods changed, or even invoices corrected. The decisive factor with regard to the correct VAT rate is the time of performance.
• The tax rate must be in accordance with § 14 para. 4 No. 8 must be included in the invoice, as well as the specific tax amount. If one has in the invoices as templates with rates and notes, they must be adjusted.
• The correct tax rates must be printed on websites, flyers, promotional materials, printouts and more starting July 1, 2020. Errors in the small print etc. can also lead to warnings here.
• Software products that automatically post and/or update auctions on marketplaces, etc. must be checked to ensure that the notice texts and tax rates are correct. Of course, it must also be checked here that the final prices, net prices, etc. are correct, if possibly already created templates and the like are used. Misrepresentation or miscalculation may result in warnings. The overstatement of sales tax in turn leads to the fact that the higher sales tax rate is owed, although this may not have been claimed from the customer.
• T&Cs, price lists and all other material should be checked for correct tax rates and references. Here, stumbling hazards can quickly loom.
• In the case of online stores or other services, it is important to consider when the service is provided. It is not the order date that applies, but the date of performance. In online trading, for example, this can fall apart by ordering in June and shipping in July.
• The lower tax rate must not be displayed too early, even though it does not yet apply. This could be misleading and could possibly result in a warning.
• Ancillary services must be observed, correctly priced and labeled. This includes things like transportation, telecommunications, installation, delivery, shipping and the like. If this is listed individually, the correct tax rates, amounts and everything else must also be included here.
• If prices are adjusted, care must be taken to adjust things like standing orders, direct debit authorizations and other automated processes.

And once you are in the process of checking everything, you should immediately remember that the nonsense must be reversed on 31.12.2020.

Author: Marian Härtel

Marian Härtel ist Rechtsanwalt und Fachanwalt für IT-Recht mit einer über 25-jährigen Erfahrung als Unternehmer und Berater in den Bereichen Games, E-Sport, Blockchain, SaaS und Künstliche Intelligenz. Seine Beratungsschwerpunkte umfassen neben dem IT-Recht insbesondere das Urheberrecht, Medienrecht sowie Wettbewerbsrecht. Er betreut schwerpunktmäßig Start-ups, Agenturen und Influencer, die er in strategischen Fragen, komplexen Vertragsangelegenheiten sowie bei Investitionsprojekten begleitet. Dabei zeichnet sich seine Beratung durch einen interdisziplinären Ansatz aus, der juristische Expertise und langjährige unternehmerische Erfahrung miteinander verbindet. Ziel seiner Tätigkeit ist stets, Mandanten praxisorientierte Lösungen anzubieten und rechtlich fundierte Unterstützung bei der Umsetzung innovativer Geschäftsmodelle zu gewährleisten.