Hello everyone,
We are currently buying a house, and something very strange happened that I’m not sure how to handle.
A bit of background: after a long search and countless viewings, we finally managed to get a house.
The viewing had to be arranged at very short notice, and there was no time for my partner to join. (Luckily, I recorded everything on video.)
My partner never saw the house from the inside but was still convinced by the videos and the location, so we signed the purchase contract.
Now to the situation:
We met the real estate agent (almost) for the first time when signing the purchase contract; before that, there were only a few phone calls where he requested the financing confirmation and informed us about the notary appointment.
All other contact and the viewing were conducted with the neighbor, who is a friend of the owner.
Shortly before the notary appointment, the agent wanted to meet again. He then offered me to pay the €20,000 (about $21,500) commission in cash right after the notary appointment to avoid taxes, which could save us almost €3,000 (about $3,200).
(I have to admit, at the time I thought he meant we could save the 3% VAT, so I said it probably shouldn’t be that much.)
I declined the offer, which obviously didn’t please him...
Later, after talking to someone else, I realized that he was actually suggesting an undeclared cash payment, completely without paying 16% or 19% VAT.
A quick calculation confirmed that we would have paid about €17,000 (about $18,300) in total.
Still, I was glad to refuse because we included the commission in our financing and would have had no proof of payment.
Now here’s the strange part:
We have just received an invoice for the full €20,000 (about $21,500), which states that no VAT is due due to the small business regulation (Kleinunternehmerregelung).
This confuses me a lot. If he doesn’t have to charge VAT, how could he make the previous offer?
The company looks well-established, offers many services, and according to the website has been around for 20 years. (In theory, it could still be possible that he qualifies as a small business under VAT rules.)
I don’t understand any of this.
At the same time, he seems to be a very close friend of the owner, and we don’t want to upset him since we haven’t taken possession of the house yet.
The payment deadline on the invoice is the day after tomorrow.
I would appreciate any advice.
Best regards
We are currently buying a house, and something very strange happened that I’m not sure how to handle.
A bit of background: after a long search and countless viewings, we finally managed to get a house.
The viewing had to be arranged at very short notice, and there was no time for my partner to join. (Luckily, I recorded everything on video.)
My partner never saw the house from the inside but was still convinced by the videos and the location, so we signed the purchase contract.
Now to the situation:
We met the real estate agent (almost) for the first time when signing the purchase contract; before that, there were only a few phone calls where he requested the financing confirmation and informed us about the notary appointment.
All other contact and the viewing were conducted with the neighbor, who is a friend of the owner.
Shortly before the notary appointment, the agent wanted to meet again. He then offered me to pay the €20,000 (about $21,500) commission in cash right after the notary appointment to avoid taxes, which could save us almost €3,000 (about $3,200).
(I have to admit, at the time I thought he meant we could save the 3% VAT, so I said it probably shouldn’t be that much.)
I declined the offer, which obviously didn’t please him...
Later, after talking to someone else, I realized that he was actually suggesting an undeclared cash payment, completely without paying 16% or 19% VAT.
A quick calculation confirmed that we would have paid about €17,000 (about $18,300) in total.
Still, I was glad to refuse because we included the commission in our financing and would have had no proof of payment.
Now here’s the strange part:
We have just received an invoice for the full €20,000 (about $21,500), which states that no VAT is due due to the small business regulation (Kleinunternehmerregelung).
This confuses me a lot. If he doesn’t have to charge VAT, how could he make the previous offer?
The company looks well-established, offers many services, and according to the website has been around for 20 years. (In theory, it could still be possible that he qualifies as a small business under VAT rules.)
I don’t understand any of this.
At the same time, he seems to be a very close friend of the owner, and we don’t want to upset him since we haven’t taken possession of the house yet.
The payment deadline on the invoice is the day after tomorrow.
I would appreciate any advice.
Best regards
Wolkensieben schrieb:
I copied something from an authority and pasted it here, then added my own words explaining how I interpret it for myself—that authorities can request account transactions if there is a legitimate interest.
If you see it differently, that’s perfectly fine. I have no issue with that. But you can’t just interpret it your way and then claim that only your interpretation is correct, and of course that authorities can easily access account transactions.
When accessing the data, you only get the information mentioned in post #50.
Putting aside the fact that the amount should not even appear in the account if paid in cash.
If handled well, it won’t be noticed by any tax auditor.
Incidentally, dishonest individuals among restaurant owners, tradespeople, and others cheat not only on their income but also on their expenses.
I once read an interesting report from a landlord of a commercial property used as a restaurant.
The tenant disappeared without a trace, so the landlord decided to operate the restaurant himself.
Supposedly, he was honest with taxes compared to the previous tenant and as a result faced many problems.
The new operator suddenly had significantly higher sales than his predecessor in the same restaurant without changing the concept.
He took over the staff contracts and wanted to pay their wages officially. Then the question arose about the additional cash payments the employees used to receive under the table. Previously, all purchases had been paid for in cash, and only every second invoice was recorded in the books.
The honest operator then had the issue that his figures were significantly above the industry average, which regularly triggered audits and special VAT inspections.
It’s the same with tradespeople. Customers buy tiles directly from the hardware store, and the tiler gets paid cash in hand for his work, which balances the relationship between goods and services again.
Additional note on the small business regulation:
Besides the previous year’s threshold of 22,000 euros (approx. 22,000 USD), there is also a 50,000 euros (approx. 50,000 USD) limit for the current year. If the business does not exceed the 22,000 euros threshold in the previous year and is not expected to exceed 50,000 euros in the current year, it remains classified as a small business for the current year as well. The status is only lost the following year.
Therefore, even a turnover of 30,000 euros (approx. 30,000 USD) in the current year could still fall under the small business regulation.
If handled well, it won’t be noticed by any tax auditor.
Incidentally, dishonest individuals among restaurant owners, tradespeople, and others cheat not only on their income but also on their expenses.
I once read an interesting report from a landlord of a commercial property used as a restaurant.
The tenant disappeared without a trace, so the landlord decided to operate the restaurant himself.
Supposedly, he was honest with taxes compared to the previous tenant and as a result faced many problems.
The new operator suddenly had significantly higher sales than his predecessor in the same restaurant without changing the concept.
He took over the staff contracts and wanted to pay their wages officially. Then the question arose about the additional cash payments the employees used to receive under the table. Previously, all purchases had been paid for in cash, and only every second invoice was recorded in the books.
The honest operator then had the issue that his figures were significantly above the industry average, which regularly triggered audits and special VAT inspections.
It’s the same with tradespeople. Customers buy tiles directly from the hardware store, and the tiler gets paid cash in hand for his work, which balances the relationship between goods and services again.
Additional note on the small business regulation:
Besides the previous year’s threshold of 22,000 euros (approx. 22,000 USD), there is also a 50,000 euros (approx. 50,000 USD) limit for the current year. If the business does not exceed the 22,000 euros threshold in the previous year and is not expected to exceed 50,000 euros in the current year, it remains classified as a small business for the current year as well. The status is only lost the following year.
Therefore, even a turnover of 30,000 euros (approx. 30,000 USD) in the current year could still fall under the small business regulation.
H
HilfeHilfe13 Jan 2021 07:56Or the pizza baker who currently runs a takeout business and buys his supplies in cash at Aldi, but orders the pizza boxes from the supplier on account 😉
H
hampshire13 Jan 2021 09:33From your description of the real estate agent’s behavior, it seems suspicious. I do not pay invoices that are incorrectly issued. Therefore, formally point out in writing that information is missing — the contracting party according to the agency agreement, tax ID, and VAT number must be included. I would also request proof of the agent’s license under Section 34c of the Trade Regulation Act. Otherwise, the contract could be contested. If the documents are complete: pay 7%. If there is no license: do not pay due to attempted fraud and consider reporting it if the agent causes trouble. If there is no proper invoice, do not pay. If the agent insists on being treated as a small business owner, I would ask for confirmation from the tax office. This has nothing to do with stinginess or envy.