Tax reserves for online sellers: how to work them out

Your sales are growing and you wonder how much of the money in your account is yours. The law gives no fixed percentage. You set money aside for three taxes, and you work out each from your own figures: the VAT you collected, income tax and trade tax.

Last updated: 27 October 2026

In brief

VAT: the money is not yours. You work out the tax for the return period yourself and pay it on the tenth day after the period ends, or one month later with a permanent extension (§ 18 paras. 1, 6 UStG). Put it aside every month.
Income tax: it depends on your taxable income. The 2026 tariff is set by § 32a EStG.
Trade tax: it depends on your trade income, for sole traders and partnerships after an allowance of €24,500, and on your municipality's multiplier (Hebesatz).

What percentage do you set aside?

There is no rule that fits everyone. A flat figure you read somewhere fits a different profit, a different family status and a different municipality. A better way is an estimate in three steps: VAT from your sales, income tax from the expected profit, trade tax from the same profit. You can repeat it with new figures at any time.

VAT: set it aside every month

As a regular VAT payer you collected VAT in your selling prices, and you pass it on to the tax office. The law requires an advance return by the tenth day after the return period ends, in which you work out the tax yourself, and the prepayment is due on that tenth day (§ 18 para. 1 UStG); with a permanent extension both deadlines move by one month (§ 18 para. 6 UStG, § 46 UStDV): VAT filing extension and special prepayment. The return period is the calendar quarter; if last year's tax was more than €9,000 it is the calendar month. If it was no more than €2,000, the tax office can release you from advance returns. If you traded for only part of last year, you scale that tax up to a full year; if you start in 2026, the expected tax for the current year counts (§ 18 para. 2 UStG).

In practice: transfer the VAT you worked out to a separate account every month, not only when the return is due. From the VAT you collected you subtract input VAT from invoices (§ 15 para. 1 no. 1 UStG). How the return works: File your VAT return online.

Income tax and trade tax: a worked example

The example is a calculation, not advice. It shows how to proceed; your figures will differ.

Assumptions (tax year 2026): profit from the business €40,000. Taxable income €35,000, because the example assumes €5,000 of deductions (for instance special expenses). Single, assessed individually, one business, no other income. Trade income equals profit, with no add-backs or reductions. The municipality's multiplier is 400 percent. Solidarity surcharge and church tax are not included.

Income tax under the 2026 tariff. Taxable income lies between €17,800 and €69,878. § 32a para. 1 EStG gives the formula (173.10 • z + 2,397) • z + 1,034.87, where z is one ten-thousandth of the part above €17,799. Here z = (35,000 − 17,799) / 10,000 = 1.7201. Result: (173.10 • 1.7201 + 2,397) • 1.7201 + 1,034.87 = 5,670.1, rounded down to €5,670. The basic allowance for 2026 is €12,348; up to that the tariff is zero.

Trade tax. Trade income is rounded down to full €100 and, for individuals, reduced by an allowance of €24,500 (§ 11 para. 1 GewStG): 40,000 − 24,500 = €15,500. The base rate of 3.5 percent applies (§ 11 para. 2 GewStG): a tax base amount of €542.50. With the municipality's multiplier (§ 16 GewStG), at 400 percent: 542.50 • 4 = €2,170.

Trade tax credit. Under § 35 EStG, income tax on business income is reduced by four times the trade tax base amount, at most by the part of income tax that falls on business income (maximum reduction) and at most by the trade tax actually payable. Here: 4 • 542.50 = €2,170; the maximum reduction is €5,670 because all income is business income, and the trade tax is €2,170. Income tax therefore falls to 5,670 − 2,170 = €3,500.

Total in the example: 3,500 + 2,170 = €5,670. In this example that is about 14 percent of the profit; with other figures it differs. More on trade tax for sellers: Trade tax for Amazon sellers.

The municipality sets the multiplier; if it has not set a higher one, it is 200 percent, and 280 percent from the 2027 assessment period (§ 16 para. 4 sentence 2, § 36 para. 5b GewStG). Ask your municipality for its rate before you calculate.

Prepayments: when they fall due

You do not pay income tax only when the assessment arrives. You have to make prepayments on 10 March, 10 June, 10 September and 10 December (§ 37 para. 1 EStG), which the tax office sets by a prepayment notice (§ 37 para. 3 EStG). They are in principle based on the income tax of the last assessment. If you expect clearly more or less for the current year, the tax office can adjust them until the end of the 15th calendar month after the tax year (§ 37 para. 3 sentence 3 EStG). How to ask for an adjustment: Adjust your income tax prepayment.

Common mistakes

Mixing up VAT and profit. VAT is not part of your profit; it goes to the tax office.
Relying on one percentage. Work with your profit, your tariff and your multiplier.
Forgetting trade tax. It arises above the allowance.
Missing the prepayment dates. 10 March, 10 June, 10 September, 10 December.

How VAT GPT helps

VAT GPT is the tax software for Amazon and eBay sellers in Germany: your OSS return first, then every other tax you owe, calculated and filed in one place. You upload Amazon and eBay reports and VAT GPT splits the VAT for Germany and the EU (OSS). VAT GPT also creates the VAT return, the EÜR and the trade tax and income tax returns; with VAT GPT Pro you send them through ELSTER. There is Free, Go (30 days free with all Pro features) and Pro (€49 per month or €444 per year, including VAT). Try for free now

Frequently asked questions

What percentage of my income must I set aside? The law has no fixed percentage. Work out VAT, income tax and trade tax from your figures.

Is the VAT in my account mine? No. You work it out in the advance return and pay it on the tenth day after the return period, or one month later with a permanent extension (§ 18 paras. 1, 6 UStG).

When are income tax prepayments due? On 10 March, 10 June, 10 September and 10 December (§ 37 para. 1 EStG), when the tax office sets them.

When does trade tax arise? For individuals, trade income is reduced by €24,500 (§ 11 para. 1 GewStG); only above that is there a base amount.