As the year draws to a close, there is still a lot of work for business owners to do. Because now they can ensure that they set the right course for 2022 if they use the appropriate levers, for example to reduce their tax burden. We have put together what these are below:
Table of contents:
- Gifts for business partners at the end of the year
- Avoid statute of limitations on outstanding claims
- Comply with sales limits for small business regulations
- Use inflows and outflows of income and expenses
- Apply immediate and special depreciation in a targeted manner
- Submit final invoice for restart assistance
- Gather all invoices for the year for closing
- Planning for the new year
Gifts for business partners at the end of the year
As we all know, small gifts preserve friendship. That’s why you shouldn’t forget to thank your customers and partners for their cooperation and give them a gift at Christmas. Useful everyday items such as USB sticks, key rings and calendars, as well as sweet refreshments in the form of gingerbread and marzipan are always happy to be sent. You should note that the gifts do not cost more than 35 euros per person per year including sales tax. You can then book this amount as business expenses.
**Avoid statute of limitations on outstanding claims
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Open claims usually become statute-barred after three years, with the period beginning at the end of the year in which the claim arose. That means:****At the end of 2021, this affects claims that originally came from 2018. To prevent this from happening, entrepreneurs should check whether their customers have paid all their invoices. If this is not the case, it helps to apply for a court order for payment - without any errors. Because time is short and a simple reminder is not enough.
Comply with sales limits for small business regulations
To take advantage of the small business regulation, the turnover subject to VAT must not exceed 22,000 euros in the current year and is unlikely to be more than 50,000 euros next year. Small business owners therefore have to determine what their sales were in 2021.
If it is less than 22,000 euros and is unlikely to rise to more than 50,000 euros next year, you can continue to take advantage of the small business regulation and avoid having to calculate VAT. If the turnover is more than 22,000 euros, standard taxation will apply from January 1, 2022.
Use inflows and outflows of income and expenses
The inflow/outflow principle must be applied when determining profits using the revenue surplus calculation (EÜR). This means that regular income and expenses that occur shortly before or after the end of the year must be assigned to the year to which they belong. The deadline is ten days, which is why we are talking about the 10-day rule.
An example: the telephone bill for December, which is paid at the beginning of January. It must be assigned to the year 2021. However, if you write an invoice later and ask suppliers to send invoices earlier, they can postpone inflows and outflows in such a way that your company’s profit in 2021 is reduced.
Conversely, you can send invoices for 2021 early and ask suppliers to prepare them later if you want to bring your tax burden forward.
Apply immediate and special depreciation in a targeted manner
Anyone who buys capital items such as a computer or a company car can influence when this reduces their tax burden - on the one hand, by consciously choosing the time of purchase. The purchase value must generally be depreciated over the normal useful life starting from the year of purchase, whereby the official depreciation tables must be applied. On the other hand, special depreciation or investment deductions (IAB) can also be claimed if necessary.
The latter serve to reduce profits in advance of investments that are to take place in the next three years. Up to 50 percent of the expected acquisition or production costs of the respective asset are possible, but a maximum and total of 200,000 euros if the company’s profit does not exceed 200,000 euros. Later, the IAB must be dissolved, which means that it is a tax deferral.
If an asset costs no more than 800 euros net and can be used independently, it is considered a minor asset. The acquisition costs may be booked immediately as expenses (immediate depreciation).
Submit final invoice for restart assistance
Recipients of the restart aid who submitted their application directly and have already received an approval or partial approval must submit a final statement online by December 31, 2021 at the latest. The exception is application notices with approvals or partial approvals that were or will be issued from December 1, 2021 or later.
As far as submitting applications for the use of aid programs in the context of the Corona pandemic and the submission of other final accounts are concerned, the deadlines that originally applied until the end of the year are: extended been.
Gather all invoices for the year for closing
Since invoices come from different sources such as portals or email inboxes, there is a high risk that some will fall by the wayside and be forgotten. In order to look forward to the annual financial statements in a relaxed manner, you should ensure in good time that all invoices are available. Ideally, companies will automate their invoice receipt so that all invoices are available in the future and the work before the holidays is reduced. We have further information about the upcoming annual financial statements here summarized for you.
Planning for the new year
To ensure that the New Year has the best possible outcome, it should be planned carefully. The first step: an analysis of the current year to determine what successes and weaknesses there were. In this context, it is important to check whether the previous goals are still current or whether new ones need to be set and, if so, which ones. Based on this, a strategy should be defined. Last but not least, it is important to derive measures for implementation.
