the Special advance payment is a special form of advance payment as part of the German advance VAT return. It must be made by companies that are obliged to submit monthly advance VAT returns to the tax office and serves to ensure regular tax payments.
The special advance payment is not a payment to a business partner, but an additional advance payment to the tax office. It reduces the VAT prepayments for the following months and is offset annually.
Context and area of application:
Companies that are legally obliged to submit their advance VAT returns on a monthly basis must usually also make a special advance payment - especially when applying the so-called Permanent extension. This extension of the deadline grants the company a deferral of one month for the submission of the advance return, but obliges it to make an additional payment.
The amount of the special advance payment is usually one eleventh of the VAT payable declared in the previous year and must generally be paid to the tax office by 10 February of the current year.
Differentiation from similar terms:
In contrast to the payment on account (advance payment in business payment transactions) or Advance Invoice the special advance payment is a tax obligation to the tax authorities - not a transaction in operational company accounting or in the ERP system (e.g. SAP Business One).
Example or illustrative comparison:
A company reported a VAT liability of € 110,000 in the previous year. For the permanent extension, it must make a special advance payment of € 10,000 (one eleventh). This payment is credited again in December of the same year or offset against the December advance return.
Additional notes on system logic:
- The special advance payment is generally not paid directly via the ERP systembut are recorded via the tax declaration module or as part of financial accounting.
- In SAP systems, technical mapping usually takes place outside the operational sales or purchasing processes.
Related terms in the tax context:
- Advance turnover tax return
- Permanent extension
- Value added tax payable
- Prepayment
- Payment on account (business)
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