Tax year for income tax purposes is the calendar year
Computation of taxable income
The tax year for income tax purposes is the calendar year.
In order to determine the total amount of taxable income, the
amounts of income from the different categories must be calcu-
lated separately.
For the first two categories of income (income
from agriculture and forestry, and income from commercial
business activity), the normal method of computing the gross
income relevant for income taxation is the “equity comparison
method” under which the relevant gross income is the differ-
ence between the net worth of the assets pertaining to each
category of income at the end of the preceding assessment
period compared to the current assessment period.
The “equity
comparison method” is mandatory for income from agriculture
and forestry or commercial business activity if annual profts ex-
ceed € 50,000 and sales revenue exceeds € 500,000. If income
is below these thresholds, the “cash basis accounting method”
may be used. Under this method, taxable income is computed
by reducing gross income by income-related expenses in accor-
dance with cash receipts and disbursements.
Business-related
expenses are generally deductible under both methods. In the
case of income from self-employment, the taxpayer can choose
between the “equity comparison method” and the “cash basis
accounting method”.
EU Forecast
euf:ba.18g:120/nws-01