Sales tax is an important focus in almost all training and study programs in tax law. At the same time, VAT issues play an important role in law firm practice. Therefore, let’s take a look at the basic system of the VAT Act (UStG), the correct audit order and the significance of the EU VAT System Directive (VATSystRL)!

In everyday usage – let’s leave out discussions among tax consultants here – there is always confusion between the terms sales and VAT. It is therefore important to know in advance that both designate exactly the same tax type. There are no differences, so that the VAT law could also have been adopted under the name “VAT law”.

‘VAT’ is the term coined by the VAT System Regulation under European law. Because the tax is subject to the added value created by the entrepreneur, whereby the tax ultimately only has to pay the (private) end user. In technical jargon, sales tax is therefore also referred to as “all-phase net tax”.

Introductory example: Entrepreneur A buys goods from Entrepreneur B for EUR 150.00. B sells these goods for EUR 250.00 to private end customers. A charges B EUR 150,00 plus 19 % VAT. B receives the tax amount refunded by the tax office (pre-tax), so that he has paid "under the bottom line" only EUR 150.00 for the goods. B, on the other hand, charges the end customer EUR 250.00 plus VAT.

As a result, only the value added by B of EUR 100.00 (sales price of EUR 250.00 minus purchase price of EUR 150.00) was taxed. The VAT is – only as a small marginal note – federal and state governments jointly entitled (Article 106 paragraph 3 sentence 1 GG).

The sales tax, regardless of whether we are talking about theory or practice, always follows a uniform scheme. According to § 1 (1) no. 1 UStG are subject to