What do taxes have to do with the cloud?

Are you looking to move your financial accounting into the cloud? In this case, you need to pay attention to the accounting location when selecting a provider, and agree this contractually.

Where accounting data are provided in a cloud, you first need to look into the question of where the accounting location is. The tax code still envisages the ledgers of a company being kept domestically; any exceptions from this are subject to an approval procedure by the appropriate tax authority.

VAT? That, too!

E-invoicing and VAT

The recipient location principle is also authoritative for cloud services viewed from a VAT perspective. Where foreign companies provide services to German companies, the regulations of §13b of the UStG are authoritative; that is, the German business owner owes the VAT as the service recipient. With a view to electronic invoicing, tax legislators have introduced a number of facilities for companies in recent years. However, it is essential for any newly implemented billing process to recheck whether the preconditions posed by the legislators for electronic invoices are actually met.

Withholding taxes on licensing fees

Another topic in the context of the service to be provided can arise when the company providing the service is registered abroad and bills for licensing fees. The temporary granting of rights triggers a limited tax obligation of the foreign business owner in Germany; the consequence of this is that the recipient of the service, the German business owner, can be held liable by the financial authorities for withholding tax that was not withheld and paid. The fiscal classification of the remuneration to be paid to the foreign cloud provider thus becomes extremely important.

But not to worry: we have tax experts on board, and they can keep an eye on your spheres of activity. Benefit from our predefined solutions.

Contact us!