How Finom Accounting works
Finom Accounting calculates VAT using the cash method (Ist-Versteuerung): VAT is recognized when payment is actually received in your account, not when you issue the invoice.
Cash method vs standard method
Germany has two ways to time VAT:
Cash method (Ist-Versteuerung) — VAT is based on when money hits your account.
Standard method (Soll-Versteuerung) — VAT is based on when you issue the invoice or provide the service, even if the customer has not paid yet.
By default, the Finanzamt assumes the standard method until you have official permission to use the cash method.
What you should do
If you use Finom Accounting and have not yet told your tax office (Finanzamt) that you apply the cash method, you should do so. Without that permission, your VAT returns may be slightly off compared with what the tax office expects.
You can send the request through ELSTER in a few minutes.
How to apply via ELSTER
Log in at www.elster.de.
Go to Alle Formulare (All forms) → Sonstige Nachrichten (Other messages) → Sonstige Nachricht an das Finanzamt (Other message to the tax office).
Select your Finanzamt.
Subject line: Antrag auf Ist-Versteuerung gemäß § 20 UStG
Paste the letter below. Include either option A or B (not both), then add your name.
“Sehr geehrte Damen und Herren,
hiermit beantrage ich die Gestattung der Ist-Versteuerung gemäß § 20 UStG rückwirkend ab dem 01.01.2025.
[Choose one:]
Option A: Mein Gesamtumsatz im Kalenderjahr 2024 hat die Grenze von 800.000 Euro nicht überschritten.
Option B: Ich übe eine freiberufliche Tätigkeit aus.
Ich bitte um eine schriftliche Bestätigung.
Mit freundlichen Grüßen,
[Your name]”
Disclaimer
This article is for general information only and does not constitute tax advice. For your situation, consult a Steuerberater or the Finanzamt.