Equivalence surcharge: What is it and what are its accounting implications?
Posted: Sat Dec 21, 2024 4:37 am
We analyze how the VAT equivalence surcharge works and what its accounting and billing implications are.
The equivalence surcharge is never applied to wholesale trade, services or industrial activities.
If more than 20% of our turnover is made to self-employed workers or companies, we will have to apply the general VAT regime and not the equivalence surcharge.
When you take the step of opening a business or starting a business, many doubts arise related to tax obligations. Some of them are related to the equivalence surcharge.
Share!Start of marked textIf you are a germany email list retailer, you will be interested in knowing all the details and tax obligations regarding the equivalence surcharge.End of marked text
Specifically, doubts about the equivalence surcharge are projected, fundamentally, on two aspects: what is its influence on supplier-client relations (and, therefore, on billing ) and what accounting repercussions it has.
When the equivalence surcharge is applied
The equivalence surcharge is a type of special VAT regime that applies to retail traders , whether they are individuals or joint ventures, but never companies. Specifically, to those businesses that deal with the retail sale of goods that have not been transformed by them. That is, to those that are a mere intermediary who buys from a supplier and sells directly to the public.
The equivalence surcharge regime applies to certain retail businesses
There are some exceptions that allow us to avoid this regime. For example, if more than 20% of our turnover is made to self-employed persons or companies, we can apply the general VAT regime in the following fiscal year. We can continue to do so during the following fiscal year as long as we maintain this percentage and can justify it with the corresponding invoices and documents.
Furthermore, if we were to trade the following products, we would be excluded from the equivalence surcharge regime .  Among others, the following stand out:
When we make a sale, it is the product supplier who charges the equivalence surcharge . Exactly the same as with VAT, with the peculiarity that it is added separately to the VAT and according to the tax rate. More specifically:
In short, the invoice will include the taxable base, the VAT and, based on this, an equivalence surcharge that is also calculated on the taxable base .
Invoices with equivalence surcharge: what they should contain
The first thing is always to prove that we are subject to this special regime. With proof, everything is always much simpler. From the point of view of the acquisition of goods , it is the supplier who must include the equivalence surcharge when invoicing us.
For example , let's imagine that we are buying shoes to sell them directly. We buy 50 pairs of shoes whose VAT is 21% and the standard cost is 20 euros per unit. In this case, the supplier must issue us an invoice, but what we pay will be more. And the 50 euros must also be subject to an equivalence surcharge of 5.2% on the taxable base.
Whether it is an invoice that we have to issue or an invoice that we have received , the rest of the data that must appear on the invoice are exactly the same as those in a general VAT regime invoice (invoice date, data of the issuer and recipient, taxable base, invoice number, etc.).
Issuing a separate set of invoices for this type of transaction is not necessary, but it can help to organize management.
On the other hand, a common question is whether invoices should be issued in separate series for this type of operation to differentiate them from normal ones. The answer is that it is not necessary. However, it is necessary to differentiate the deliveries in which the equivalence surcharge is charged from the rest, issuing them in separate invoices in any case. Often, for reasons of order, management or streamlining, it is possible to choose to issue these invoices in a different series.
The equivalence surcharge is never applied to wholesale trade, services or industrial activities.
If more than 20% of our turnover is made to self-employed workers or companies, we will have to apply the general VAT regime and not the equivalence surcharge.
When you take the step of opening a business or starting a business, many doubts arise related to tax obligations. Some of them are related to the equivalence surcharge.
Share!Start of marked textIf you are a germany email list retailer, you will be interested in knowing all the details and tax obligations regarding the equivalence surcharge.End of marked text
Specifically, doubts about the equivalence surcharge are projected, fundamentally, on two aspects: what is its influence on supplier-client relations (and, therefore, on billing ) and what accounting repercussions it has.
When the equivalence surcharge is applied
The equivalence surcharge is a type of special VAT regime that applies to retail traders , whether they are individuals or joint ventures, but never companies. Specifically, to those businesses that deal with the retail sale of goods that have not been transformed by them. That is, to those that are a mere intermediary who buys from a supplier and sells directly to the public.
The equivalence surcharge regime applies to certain retail businesses
There are some exceptions that allow us to avoid this regime. For example, if more than 20% of our turnover is made to self-employed persons or companies, we can apply the general VAT regime in the following fiscal year. We can continue to do so during the following fiscal year as long as we maintain this percentage and can justify it with the corresponding invoices and documents.
Furthermore, if we were to trade the following products, we would be excluded from the equivalence surcharge regime .  Among others, the following stand out:
When we make a sale, it is the product supplier who charges the equivalence surcharge . Exactly the same as with VAT, with the peculiarity that it is added separately to the VAT and according to the tax rate. More specifically:
In short, the invoice will include the taxable base, the VAT and, based on this, an equivalence surcharge that is also calculated on the taxable base .
Invoices with equivalence surcharge: what they should contain
The first thing is always to prove that we are subject to this special regime. With proof, everything is always much simpler. From the point of view of the acquisition of goods , it is the supplier who must include the equivalence surcharge when invoicing us.
For example , let's imagine that we are buying shoes to sell them directly. We buy 50 pairs of shoes whose VAT is 21% and the standard cost is 20 euros per unit. In this case, the supplier must issue us an invoice, but what we pay will be more. And the 50 euros must also be subject to an equivalence surcharge of 5.2% on the taxable base.
Whether it is an invoice that we have to issue or an invoice that we have received , the rest of the data that must appear on the invoice are exactly the same as those in a general VAT regime invoice (invoice date, data of the issuer and recipient, taxable base, invoice number, etc.).
Issuing a separate set of invoices for this type of transaction is not necessary, but it can help to organize management.
On the other hand, a common question is whether invoices should be issued in separate series for this type of operation to differentiate them from normal ones. The answer is that it is not necessary. However, it is necessary to differentiate the deliveries in which the equivalence surcharge is charged from the rest, issuing them in separate invoices in any case. Often, for reasons of order, management or streamlining, it is possible to choose to issue these invoices in a different series.