What is the turnover limit before VAT registration?

What is the turnover limit before VAT registration?

Turnover

Personal Income Tax (IRPF), which is levied on the business income obtained by the self-employed, being able to choose between the Simplified Direct Estimation System, the Normal Direct Estimation System and the Objective Estimation System (Modules). A certain amount is paid quarterly and then, annually, the income tax return (form 100) is filed, which can be paid or refunded.

As a self-employed person you must file your quarterly returns telematically by means of the so-called PIN 24 Hours. Likewise, as a self-employed worker you are obliged to pay an advance to the Treasury, which can take two forms:

– IRPF installment payments: You must file form 130 if you are taxed by direct estimation or form 131 if you are taxed by modules, until the 20th day in the months of April, July and October and until January 30.

– Withholdings on your invoices: if you are registered under a professional activities IAE heading and more than 70% are clients that allow withholdings (companies, institutions or other self-employed, i.e. not private clients), you may include a withholding of 15% on your invoices. For new self-employed professionals there is a reduced rate of 7%.

Turnover example

When the decision is made to start a self-employed activity, the first thing to know is the tax obligations to which we are going to be subject. One of them is the collection and management of VAT.

Both the self-employed and the companies are, in general, VAT taxable persons. This means that the invoices they issue for sales or services rendered must be subject to the tax.

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The tax is levied by applying a percentage to the taxable base (the taxable base is the amount that indicates the cost of the operation carried out), which will be 21% (general rate), 10% (reduced rate) or 4% (super-reduced rate) depending on the nature of the operation.

Every three months, the self-employed person must pay to the Tax Agency the difference between the tax charged to his customers on the income invoices and the tax borne on the invoices for the expenses necessary to carry out the economic activity.

In general, all operations, whether sales of goods or services, are subject to the general tax rate of 21%. What is important to know is which ones must apply the reduced and super-reduced rate.

Aeat

The forms for filing the forms may be those indicated below, unless it is established that it is compulsory to use any particular form and taking into account that, in general, the filing of the tax return forms will be made through the Internet.

The taxpayers, whose tax return period had started prior to the date of entry into force of the Ministerial Order approving the form, may file the tax return within the two months following the date of its publication in the BOE.

FORM 035. DECLARATION OF COMMENCEMENT, MODIFICATION OR CESSATION OF OPERATIONS INCLUDED IN THE SPECIAL REGIMES APPLICABLE TO TAXPAYERS WHO PROVIDE SERVICES TO PERSONS WHO ARE NOT TAXPAYERS OR WHO CARRY OUT DISTANCE SALES OF GOODS OR CERTAIN DOMESTIC SUPPLIES OF GOODS.

Form 113. Communication of data relating to capital gains due to a change of residence to another Member State of the European Union or of the European Economic Area with effective exchange of tax information: between the date of the transfer and the date of the end of the tax return period corresponding to the first tax year in which the taxpayer did not have such status as a result of the change of residence and the communication of variations, two months from the date of their occurrence.

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Turnover

VAT is defined as an indirect tax on the sale, import of goods or provision of services. This added value has an indirect impact on income, that is, each time the consumer buys, consumes products, services, or performs commercial transactions or imports, he/she will pay an additional value at the time of purchase.

In Colombia, the general VAT rate is 19%, and is applicable to both goods and services, which may be taxed (to which a rate is applied), excluded (those that do not generate sales tax), exempt (taxed at 0% rate) and not subject (governed by the sales tax regime).

All legal entities and individuals who purchase a good, product or acquire a service. Once the VAT is paid when the purchase is made, if the person declares taxes, he/she can use the receipts and use deductions to reduce the value to be cancelled from his/her tax payment.

The value of VAT is collected by the DIAN and its recipient is the State, which uses this money as a contribution to meet the basic needs of the population, actively contributing to the improvement of human quality.

What is the turnover limit before VAT registration?
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