Are language school exempt from VAT or must they register and pay VAT if the turnover exceeds 100,000? (That is the service of providing language courses)
I have been reading and would love to check if I have understood correctly?
I was looking at Art 21 11a and 11b of the Federal Act on Value Added Tax.
Art. 21 Supplies exempt from the tax without credit
1 A supply that is exempt from the tax without credit and for which taxation under Article 22 is not opted for is not taxable.
2 Exempt from the tax without credit are:
#11
the following supplies in the field of education and training:3
a.
supplies in the field of the education of children and young people, of instruction, of training, of further education and of professional re-training, including instruction given by private teachers or at private schools,
b.
courses, lectures, and other events of a scientific or educational nature; lecturing activity is exempt from the tax without credit, irrespective of whether the fee is paid to the instructing person or his employer,
Just to be clear, companies normally register for VAT once their sales reach 100,000 pa turnover. But they don't pay VAT, they must charge VAT to their customers and pay the balance after deducting VAT from their business expenses (telephone, stationary, supplies, petrol etc).
I don't know the rules about VAT for education, but check to see if you can register because then you still might be able to get a refund on your Vatable supplies.
There are many companies in the UK that can do this, for example (well this was some years ago, rules may have changed) companies that sell childrens clothes at 0% VAT could claim back VAT paid on supplies. And at 15% (as it was when i was there) that could be quite a saving.
Deduct a bit for themselves and give the rest to the government.
Also the set of rules must be much bigger than the short thing we read in the link, perhaps institutions need some sort of recognition as is the case in some countries.