Freelancers & Self-Employed: What does the tax calendar look like for 2021?

Corona has basically destroyed the concept of time and calendars being the static and familiar dial by which our lives were conducted. You know this is true when the German tax year has updated deadlines! Alongside various meaningful changers for self-employed and freelance people, what changes to the calendar could impact you? Get your FiloFax and pencils out, as we are going to review this forthcoming 2021 financial year.

With everything going on lately, you may have missed some interesting tax news about change going into effect in 2021 in regards to taxation. As the business community and government agencies began to realise the extent of the crisis, as well as certainly some high pressure situations for Steuerberaters, the tax calendar was slightly revised and we have all the dates available at the time of writing.

These dates and deadlines primarily relate to your tax returns and, above all, to the due date of certain tax payments. Here at a glance, we have listed the most important taxes for you, which you should note in your tax calendar for 2021 relating to: 

• Sales tax and sales tax advance returns
• Advance payments for trade tax
• Payments for income tax and for corporation tax
• Advance registrations for income tax and church tax
• Summary messages
• Tax returns
• Dates of the advance VAT payment & advance VAT return

Every self-employed person has to pay sales tax if he sells services or delivers goods. The content for this is regulated in the Value Added Tax Act. There is only an exception to the payment of sales tax if you are classified as a small business according to § 19 USt. Due to the current Corona crisis, there was a temporary VAT reduction in 2020 from 19% to 16% for normal rates and from 7% to 5% for reduced rates.

Regardless of this, as an entrepreneur, you are obliged to always submit a VAT return based on your income for the year 2021. This must be done either every month or quarterly. The VAT returns you can make the tax office via the portal ELSTER. A bank account like Kontist also pre-separates your tax payable for VAT - if you are into that kind of convenience.

If there are good reasons that you cannot keep the standard deadlines, you have the option of applying for a permanent extension of the deadline. In this case, the tax office can grant you a grace period and grant you an extension of one month.

When it comes to VAT, most likely you are required to send a monthly submission if the total of your tax amount was over EUR 7,500 in the previous tax year. The submission must also be made monthly for you as the founder in your first year of self-employment. This can be quarterly however, if your tax burden in the last calendar year was between EUR 1,000 and EUR 7,500, you only have to make the advance return of VAT once per quarter.

You should register the following tax dates 2021 for the next year with regard to your sales tax: 

March: Wednesday, March 10th 2021 and payment by Monday, March 15, 2021

April: Monday, April 12th, 2021 (for both monthly and quarterly registration) and payment by Thursday, April 15, 2021

May: Monday, May 10th, 2021 and payment by Saturday 15th May 2021

June: Thursday, June 10th, 2021 and payment by Tuesday, June 15, 2021

July: Monday, July 12th, 2021 (for both monthly and quarterly registration) and payment by Thursday 15th July 2021

August: Tuesday, August 10th, 2021 and payment by  Friday 13th August 2021

September: Friday, September 10th, 2021 and payment by Wednesday, September 15, 2021

October: Monday, October 11th, 2021 (for both monthly and quarterly registration) and payment by Thursday, October 14, 2021

November: Wednesday, November 10th, 2021 and payment by  Monday, 15th November 2021

December: Friday, December 10th, 2021 and payment by Wednesday, December 15, 2021

Dates for the Trade Tax Return 2021

This applies to you if you are classified as a business and subject to trade tax. This is usually levied as trade income tax by the city or municipality in which you are based with your company. The trade tax is always 3.5 percent of your trade income but is multiplied by the tax rate of the city or municipality. However, this rate of assessment can differ from municipality to municipality. But there is also a special feature.

As a sole proprietorship or as people associate you an annual allowance benefit, which at 24,500 EUR. However, you always have to submit the trade tax return as part of your tax return. This can also be done automatically via ELSTER. What you need to know about collecting trade tax and what the tax rate is, is all regulated in the trade tax law. You always have to pay trade tax as a quarterly advance payment. It is always due in the middle of a quarter. Here’s how that reads in 2021:

1. 1st quarter 2021: Monday, February 15, 2021
2. 2nd quarter 2021: Monday 17th May 2021
3. 3rd quarter 2021: Monday, August 16, 2021
4. 4th quarter 2021: Monday 15th November 2021

Tax dates 2021 for income tax & corporation tax

In the Income Tax Act, abbreviated as EStG, you will find all the basics about income tax, which is important for you as an entrepreneur, freelancer and self-employed persons. In Germany, income tax is a community tax that is levied on all-natural persons on their income. The trade tax applies to you on all profits from your self-employed work.

As with most other taxes, you have to pay them in advance. The amount of your income tax is determined according to the information from your tax return. The deadline for submitting your income tax return is July 31 of the following year. If this falls on a Sunday or public holiday, the following working day is the deadline for submission. If July 31st is not possible, you can always choose between two options to avoid a late surcharge:

1. You can request a written extension of the deadline. As a rule, if you have a plausible justification, you will get an extension until September 30th without any problems.
2. If your tax return is made by a tax advisor, the deadline can be extended to December 31st without an application.

In terms of dates for the advance payments of income tax, you have to note the following tax dates in 2021 which also align with other tax prepayments as reflected above for trade tax: 

1. 1st quarter 2021: Monday, February 15, 2021
2. 2nd quarter 2021: Monday 17th May 2021
3. 3rd quarter 2021: Monday, August 16, 2021
4. 4th quarter 2021: Monday 15th November 2021

Deadline for filing tax returns

For the tax return there for you very clear deadlines which you must comply. These submission deadlines concern, among other things, the declarations on income tax, corporation tax, trade tax and sales tax. The deadline for submission is July 31st, 2021. This submission deadline is the same every year. However, you can also request an extension of the deadline.

Extension of the deadline for the tax return

These submission deadlines are automatically extended if the tax returns are carried out for you by your tax advisor. It can also be, for example, a tax aid association or comparable institutions. In these cases, the submission deadline is extended to February 28, 2022.

For many, the uncertain times of Corona have left pretty big questions around taxes and what used to be very straightforward affairs. Certainly, if you are looking for help or extensions there are many ways to go about this. Kontist even put together this trusty submission form for those seeking reductions in prepayments and delaying of payments. It can also be helpful, for those without tax agents or those wanting to be fully aware of their situation, to prepare a BWA for 2019 and 2020 to have on hand a assess how Corona has impacted you. The abbreviation BWA stands for business evaluation. An entrepreneur uses this to represent the cost and profit situation of his company. At first glance, it seems to be very similar to a balance sheet, at least as far as the definition of a BWA is concerned. However, in contrast to the balance sheet, this is not drawn up annually, but monthly. With this, you always have an up-to-date overview of the economic situation of your company. From a legal point of view, however, there is no obligation that provides for the creation of a business analysis, which is why many do not have BWA. Nevertheless, it could be good to have this on hand to prepare for the 2021 tax deadlines and reporting benchmarks. Certainly, these strange times can be weathered with good communication and clear goals and understanding, and with that, we hope we have helped you with specific information to assist you in planning!