Einfache Buchführung (Simple accounting).Doppelte Buchführung (Double-entry bookkeeping).These small-scale entrepreneurs do not include unique expense items for VAT or for input tax. Those considered small-scale entrepreneurs by Article 19 of the German VAT Act ( Umsatzsteuergesetz – UStG) do not need to charge VAT on their invoices or differentiate between gross and net amounts. Input tax can be accounted for at the payment date according to the cash inflow and outflow principle or, alternatively, at the invoice date. VAT refunds are correspondingly recorded as income. The resulting payments to the tax office must also be accounted for as a unique operating expense item. Pre-paid input tax should be physically recorded (not included in your digital EÜR) as an expense item. VAT paid by customers (7% or 19%) is accounted for as an individual item. VAT also plays an important role in the preparation of the EÜR. The amount of trade ( Gewerbesteuer) and corporation tax ( Körperschaftssteuer) to be paidĭealing with VAT within the framework of the EÜR.The amount of income tax ( Einkommensteuer) to be paid.Advance VAT returns ( Umsatzsteuer-Voranmeldungen).The amount of VAT to be paid to the tax office ( Finanzamt).The amount of profit influences the following aspects: This profit becomes the decisive basis upon which your company is taxed (or how you, as a freelancer, are taxed). Revenue minus expenses equals profit: EÜR profit calculations only take into account the amounts that are actually generated by your company. This does mean, however, that any advance payments – ingoing or outgoing – are fully taxable. Unlike with double-entry bookkeeping, obligations that arise or are settled via services don’t matter when preparing an EÜR. For this method of profit determination, all that matters are the actual amounts that flow in and out of the business’s bank accounts and the cash amounts that are payed or received. The basis of the EÜR is the cash inflow and outflow principle. It instead refers to Article 4(3) of the German Income Tax Act ( Einkommensteuergesetz, or EStG), which defines the EÜR as a method with which taxpayers can subtract their operating expenses from their revenue to determine their profits. The 4/3-Rechnung has nothing to do with any sort of four-thirds calculation. In Austria, the EÜR is also called the Einnahmen-Ausgaben-Rechnung (which differs from the German EÜR in several aspects) or the 4/3-Rechnung. The Einnahmenüberschussrechnung is a simplified type of profit calculation. But what exactly does the EÜR entail? Read on to find out what the EÜR encompasses, who may choose to prepare one and what should be kept in mind when doing so. Entrepreneurs that are not obligated to prepare a balance sheet at the end of year must instead prepare an Einnahmenüberschussrechnung, or EÜR for short.