German VAT accounting

Special prepayment - What is a special prepayment?

What is a special prepayment and when is it needed?


Special advance payment is an advance payment of VAT that you as an entrepreneur must make when you apply for a permanent extension.

Are you liable for sales tax and do you, therefore, charge your customers sales tax? Then it is important to know how to invoice the sales tax correctly.

The term special advance payment is firmly linked to the application for a permanent deadline extension.

If, as an entrepreneur, you carry out sales subject to sales tax, you must submit an advance sales tax return after each advance filing period and transfer the calculated advance sales tax payment to the tax office.

Note: Small business owners do not have to submit advance VAT returns.

When is a special advance payment necessary?

As an entrepreneur, you only have to pay a special advance payment if you submit your advance VAT returns on a monthly basis and you apply for a permanent extension of the deadline.

With the permanent deadline extension, you do not have to submit your advance VAT return within 10 days but can take an extra month. You also do not have to make the payment to the tax office until one month later.

The tax office will only grant you this deferral if you make a special advance payment at the beginning of the year. This special advance payment is then offset against the advance VAT return in December of each year.


Calculation of the special advance payment

The special advance payment is calculated on the basis of the accumulated advance VAT returns of the previous year. It amounts to 1/11 of this sum.

If a special advance payment was already made in the previous year, it must be deducted from the sum of advance VAT payments for the previous year.

The calculation is made clearer by means of an example:

Special advance payment previous year: 8,000 euros

Total advance sales tax payments in the previous year: 25,000 euros.

In the advance VAT return for December of the previous year, the entrepreneur had his special advance payment of 8,000 euros credited.

The tax actually paid is therefore 25,000 euros + 8,000 euros = 33,000 euros.

The special advance payment for this year is therefore: 33,000 euros x 1/11 = 3,000 euros.

Deadline for the special advance payment

You must always make the special advance payment by February 10 of the following calendar year.


Business in Germany