The income according to § 2 Abs. 4 EStG is the total amount of the (income tax) income. He'll be around the Special editions and the extraordinary burdens reduced. After the reduction of the income by certain allowances, household allowance, etc.) this results to taxable income, which forms the assessment basis for income tax (Section 2 (5) EStG).
Section 2 (1) of the Income Tax Act distinguishes between seven types of income, which are usually divided into profit income (three types of income) and surplus income (four types of income). In the case of profit income, the result of the operation is determined via the profit determination. It is carried out by comparing business assets (§§ 4, 5 EStG) or by comparing operating income and operating expenses (§ 4 (3) EStG). When comparing business assets, the value of business assets at the end of a financial year is compared to the value that the business assets had at the end of the previous financial year. According to Section 2 (1) No. 1-3 EStG, a distinction is made between:
• Income from agriculture and forestry, to which, among other things, the income from the business from agriculture, forestry, viticulture, horticulture, fruit growing, vegetable growing, tree nurseries (§ 13 Abs. 1 EStG).
• Business income (§ 15 EStG), e.g. B. Income of craftsmen, traders, manufacturers, carriers and commercial agents. This also includes the profit shares of the shareholders of a OHG or KG.
• Income from self-employed work (§ 18 EStG), which are among other things income from freelance work. The professional activity includes, among other things, the independent professional activity of doctors, lawyers, tax consultants and auditors.
The seven types of income can be divided into two groups. Income types in which the assessment bases are derived from profit are profit income. These types of income include income from commercial operations, income from agriculture and forestry and income from self-employed work.
The other types of income belong to excess income. The profit can be calculated for tax purposes using different profit determination methods. It is determined as a wealth difference. It is used to determine the success of the period (section taxation). Changes in assets (capital gains) are recorded for tax purposes; in the case of excess income, this is only applicable to the private sales the case.