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Who is an entrepreneur?

You are an entrepreneur within the meaning of VAT law if you independently pursue a commercial or professional activity that is designed to generate income on a permanent basis. This includes, in particular, deliveries (e.g. sale of goods in a shop, online trading) and other services (e.g. rental of property, services, repairs, IT consulting) that you provide in Germany for a fee. It does not matter whether you make a profit or whether there is an obligation to register a trade.

Legal entities (e.g. GmbH or AG) and associations of persons (e.g. GbR or OHG) can also be entrepreneurs.

The services performed within the scope of your business are generally subject to turnover tax. If your sales in the previous year did not exceed € 22,000 and are not expected to exceed € 50,000 in the current year, you can make use of the so-called small business regulation. In this case, no sales tax is charged on the services you perform. In return, however, the input tax deduction does not apply.

You are still carrying out an entrepreneurial activity even if your sales are tax-exempt. Under certain circumstances, however, VAT obligations may arise, for example, if you receive services from an entrepreneur based abroad (transfer of liability for tax - reverse charge procedure).


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