Zero reporting in tax returns: what it is, why you need it and how to explain it

What is a zero return and when does a company file a zero return?? We will show you how and when to file a zero return.

From Founder’s kitchen editorial office Last updated 31. August 2021

Zero reporting in tax returns: what it is, why you need it and how to explain it

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In principle, every company is obliged to file a tax return. This is used to calculate how much tax the company has to pay. The term "zero return" is often used in connection with tax returns Zero return. But what is it all about and when does a company file a zero return?
The most important facts at a glance:

What is a zero return?

Every company must always submit a tax return to the tax office for each year. The deadline is 31. May of the following year. If an entrepreneur has the tax return prepared by an external tax advisor, the deadline is extended to the 30th working day after the tax return is filed. September of the following year. However, the tax office must be notified in time.

The purpose of a tax return is to allow the tax office to determine how much tax a company has to pay. The so-called zero notification is of interest to those companies that are obliged to file a tax return, but are do not have to pay any tax in that period. This results if, for example, no or only marginal income was generated. The zero return is only a simplified form of the tax return.

When does an entrepreneur file a zero return?

There are different situations in which you as an entrepreneur submit a zero return.

For business tax for example, it results from the applicable exemption amount for trades. This amounts to 24 in Germany.500 Euro. If a company generates less revenue in a year, it does not have to pay business tax. However, a tax return must still be submitted. Since this does not result in any corresponding taxes, it is referred to as a zero return. It should be noted that the exemption amount only relates to trade tax. Sales tax is unaffected by this rule. It must still be paid unless the company falls under the small business regulation. This is the case if, in the first year after incorporation, a maximum of 17.500 Euro and in the second year not more than 50.000 Euro turnover has been achieved. A zero return can also be filed with the tax office in the following cases. For more information about business and sales tax and how to register, click here.

A zero return can also be used in relation to income tax be necessary. This is the case when no wages have been paid in one month. A zero return must also be filed if a company has already ceased business operations in the course of insolvency proceedings and no longer generates any income. This page provides further information on the subject of tax returns during insolvency proceedings.

Caution: If the entrepreneur submits a zero return in order to meet the deadline, although amounts would actually have been required to be reported and would have resulted in a tax payment burden, it is tax evasion, which is a criminal offense.

How to file a zero return: how to file a zero return in the tax return for the tax office

The zero return is filed in the same way as the usual tax return. The easiest way to do this is via an electronic tax return (ELSTER).

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