Hello everyone,
we are planning to have our house built in Germany by an Austrian company.
The company often builds in Germany and is authorized to submit building permit / planning permission documents in Bavaria.
However, I am uncertain about the information on their website:
Do I understand correctly that if I own a small apartment and rent it out, I am legally considered a business?
And therefore must independently pay the value-added tax (VAT) on the constructed house to the German tax office and may only pay the net amount to the Austrian company? And the company itself does not have to pay tax?
To make it more complicated: If the house is built and paid for by two people jointly, and one owns the apartment while the other does not, would half of the amount have to be paid to the German tax office and the other half by the building company to the Austrian tax office?
we are planning to have our house built in Germany by an Austrian company.
The company often builds in Germany and is authorized to submit building permit / planning permission documents in Bavaria.
However, I am uncertain about the information on their website:
Do I understand correctly that if I own a small apartment and rent it out, I am legally considered a business?
And therefore must independently pay the value-added tax (VAT) on the constructed house to the German tax office and may only pay the net amount to the Austrian company? And the company itself does not have to pay tax?
To make it more complicated: If the house is built and paid for by two people jointly, and one owns the apartment while the other does not, would half of the amount have to be paid to the German tax office and the other half by the building company to the Austrian tax office?
Tolentino schrieb:
That's true. But it's really striking that, according to the law, someone can be both a business owner and a non-business owner at the same time. No wonder people have lost trust in the rule of law.Yes, unfortunately that’s the case. But it’s nothing new; it has been like this for a long time. Income tax law focuses on profit generation, while sales tax (or value-added tax) law focuses on the intention to generate revenue. As a result, a company liable for sales tax might still be considered a hobby business for income tax purposes. This differing treatment occurs in many areas across various tax regulations.
I do not doubt that this is the case; I am simply criticizing the duplication. This goes against the basic understanding of justice for any average person.
The fact that it particularly creates a disadvantage for the "defendant" when the state is usually the opposing party in a legal dispute does not make the situation any better.
It is a common general statement, known since school, that tax law needs to be simplified, but examples like these lead me to conclude that it must also be fundamentally reformed in terms of its underlying principles.
The fact that it particularly creates a disadvantage for the "defendant" when the state is usually the opposing party in a legal dispute does not make the situation any better.
It is a common general statement, known since school, that tax law needs to be simplified, but examples like these lead me to conclude that it must also be fundamentally reformed in terms of its underlying principles.
Tolentino schrieb:
I don’t doubt that this is the case; I’m just pointing out the duplication. It goes against the legal understanding of any average person. That is not entirely correct! The same terms must simply not be used for two different tax areas. In terms of sales tax, you can refer to an entrepreneur – see Section 2 of the Sales Tax Act. In the field of income taxes, on the other hand, the term used is business operator… and then the difference becomes clearer.
That was not my point. It was about the term "contractor" and its definition according to the law and especially the case law.
In the part I quoted earlier, the definition according to the Building Code and the Federal Court of Justice differs from that of the VAT Act.
This is problematic, but it should not be the subject here.
In the part I quoted earlier, the definition according to the Building Code and the Federal Court of Justice differs from that of the VAT Act.
This is problematic, but it should not be the subject here.