Tax advisor in ... with industries: Dentists

Tax advice for dentists

As a self-employed dentist, you do not need to register a business to carry out dental treatments. However, it is not always easy to answer whether sales tax is charged on a service or not: while medical treatments are exempt from sales tax, sales tax must be paid for cosmetic operations. A tax advisor who is well versed in the medical and dental field can best give you precise information.

What tax issues do dentists have?

If you are a dentist and have set up your own practice, you not only bear the professional responsibility for the well-being of your patients, but also the financial risk. In order to run your practice in a financially stable manner, you need to know how to correctly tax your services. If you do not feel competent enough in tax law, it is worth going to a tax advisor. However, find an expert who specializes in the medical or dental sector in order to receive clear answers to more specific questions.

Does a dentist have to pay trade tax?

Dentists are one of the professions for which no business registration is required. Accordingly, you do not have to pay trade tax . However, this only applies to services that are directly linked to a therapeutic goal. Activities beyond this can, under certain circumstances, be classified as commercial. For example, if you also carry out work for other doctors in your laboratory and receive a profit for this, you must register a business for this. The sale of oral hygiene products such as toothbrushes or mouthwashes also counts as a commercial activity.

Which dental treatments are subject to VAT?

As a freelancer, you are exempt from trade tax, but not necessarily from sales tax . In small practices, you may still be able to make use of the small business regulation, provided your current annual turnover does not exceed 50,000 euros and you had less than 17,500 euros in turnover in the previous year. In many cases, however, the turnover in a dental practice is significantly higher, so you cannot be classified as a small business owner.

Irrespective of this, all medical treatments that you carry out as a doctor are exempt from sales tax. The decisive criterion is that a therapeutic goal is the primary goal. However, which activities exactly fall under this tax exemption is a complex question that a specialized tax advisor can best answer for you.

For example, bleaching, i.e. the whitening of teeth, is classified as a purely cosmetic treatment that does not improve health. As a result, you must pay sales tax for bleaching. An exception to this is made if a previous medical treatment has caused the teeth to darken and this now needs to be corrected.

The provision of dentures, braces and other orthodontic appliances is subject to sales tax if you have manufactured or repaired them yourself. However, if you purchase these materials from another dental laboratory and simply pass them on to the patient, you do not have to pay sales tax on them.

What VAT rate must a dentist apply?

While the supply and repair of braces and dentures is taxed at a reduced sales tax rate of 7%, ancillary transactions, such as the sale of dental cleaning products or medical devices, are subject to full sales tax of 19%.

Buying and setting up a dental practice

Before you can start working as a self-employed dentist, you have to find, buy and set up a practice space. A tax advisor can help you to handle the formalities of a purchase smoothly and to work out or review a financing concept. He or she will also be able to tell you how you can declare the expenses associated with setting up your practice in your tax return in order to lower your tax burden and thus reduce the overall costs a little.

For example, you can deduct expenses for brokers, tax consultants and travel costs when looking for a practice as business expenses. You can claim an investment allowance for your expenses for treatment chairs and medical equipment, and a loss carryback can be financially worthwhile, especially in the first two years of opening your practice.

Tax advisors help with business planning and accounting

Even if the job title doesn't directly reveal it: tax consultants have received good training in business administration and can give you competent advice on how to run your dental practice profitably in the long term. In addition to the actual tax questions, you can also discuss accounting problems with your tax consultant or even commission him to take over your accounting completely. Especially if you have employed staff, you can also turn to your tax consultant with questions about personnel accounting.

Sources

1. https://www.gesetze-im-internet.de/ustg_1980/__4.html
2. https://www.falch-partner.de/steuerberater/gesundheitswesen-fachberater-muenchen/steuerberater-zahnaerzte
3. https://www.arzt-wirtschaft.de/steuerfrei-dienste-des-arztes-im- Grenzbereich/
4. https://dgsfg.de/steuerberatung-gesundheitswesen/steuerberatung-zahnaerzte/
5. https://www.ageras.de/blog/steuerberatung-fuer-zahnaerzte