Initial overview

Local tax name: Umsatzsteuer/Mehrwertsteuer.
Tax management by German Ministry of Finance (http://www.bundesfinanzministerium.de).

VAT rates in Germany

  • General rate: 19%
  • Reduced rate: 7%
  • Zero rate and exempt

VAT number format

  • DE 1 2 3 4 5 6 7 8 9 (9 Digits)

Frequency of filing VAT returns

  • Monthly (Normal scheme).
  • Quarterly and annually (Simplified scheme).
  • Depending on the amount of revenue and output VAT charged in the previous year, there may be no obligation to file VAT returns.

Thresholds

  • Registration: There is no threshold.
  • Established taxpayers: There is no threshold.
  • Non-established taxpayers: There is no threshold.
  • Distance selling: From € 100,000.00 — (€ 10,000.00 from 1 July 2021)
  • Intra-Community acquisitions: € 12,500.00 (Under certain conditions)
  • Services provided by electronic means (MOSS): € 10,000.00

VAT recovery for non-established businesses

Companies not established in Germany may recover VAT if a number of requirements are met.

VAT registration obligations in Germany

In Germany, all companies carrying out transactions subject to VAT in the country are required to register for VAT purposes. In Germany, there are two types of tax numbers:

  1. The tax identification number – general tax number – (Steuernummer)
  2. The VAT identification number – (USt-IdNr)

In Germany there is no amount above which a company or business must register with the German Tax Agency. Therefore, any taxable person that carries out operations/transactions subject to VAT in Germany must register for VAT purposes in that country.

Registration for VAT purposes in Germany is generally required when any transaction subject to VAT takes place in German territory, including but not limited to:

  • Import of goods into Germany from another country.
  • The purchase and sale of goods within Germany if the seller and/or customers are not registered for VAT purposes in Germany (in this case the reverse charge mechanism is not applicable).
  • Movement of goods between Germany and another EU country, both inbound and outbound.
  • Distance selling to consumers located in Germany, via online (internet) above the set thresholds (100,000 euros at present).
  • Storage of goods/stock in Germany through warehouses or similar (Amazon Warehouses, for example).
  • The collection of tickets for attendance and admission to live events, fairs, conferences that are held in German territory.
  • Self-consumption of goods in Germany

If you have any doubts as to whether or not you should register for VAT in Germany, do not hesitate to contact us and we will analyse your case.

VAT rates

VAT TYPES RATE DESCRIPTION
GENERAL 19% For most deliveries of goods and services. It is applicable to all those not expressly listed as having a reduced or exempt VAT rate.
REDUCED 7% It applies, inter alia, to agricultural products, accommodation services, food, cultural services, passenger transport (under certain conditions).
EXEMPT 0% Certain real estate transactions, financial products, insurance, education, medical services, etc.

VAT returns

VAT returns in Germany are generally filed on a quarterly basis. However, there are situations where declarations must be filed on a monthly basis or even where VAT returns are not required.

For example, businesses registering for the first time must file VAT returns monthly during the first and second year of registration. In any case, based on the form of the company/business, the possible returns to be filed in Germany are as follows:

TYPE OF RETURN FREQUENCY REASON DEADLINE
Vat return
(preliminary)		 Monthly, in general 1st and 2nd year of registration.
VAT payable year n -1 > 7,500 euros		 10th day from the end of the reporting period.
Quarterly General 10th day from the end of the reporting period.
Yearly Always 31st May/31st December year n+1.
Annual tax return Monthly General 25th day of the following month.
EU Sales List Quarterly Intra-Community Services 25th day of the following month.
Yearly Under certain circumstances:

  • Exempt from filing VAT returns
  • Volume of VAT transactions not exceeding 200,000 euros.
  • Upon request.
 10th day of the month following the calendar year in question.
Monthly, in general Arrivals € 800,000
Dispatches € 500,000		 Tenth working day of the following month in which the movement of goods took place.

Procedure for registration

VAT registration in Germany requires the completion of a series of forms, some of which are only in German. There are specific forms for companies established in the EU and others for companies established outside the EU. The application shall include the following documents:

  • Passport and certificate of residence.
  • Certificate of registration in the Commercial Registry in your own country of establishment.
  • Certificate of being a VAT taxable person in your own country of establishment.
  • Proof of your intention to carry out an activity subject to VAT.

Registration takes between 6 and 8 weeks if the application has been correctly submitted and there are no additional information or documentation requirements from the German Tax Agency.

Appointment of a tax representative

In Germany, in principle, unlike other EU countries, businesses that are not established and have to apply for registration in Germany for VAT purposes, may not appoint a tax representative.

Other relevant information

Once your business is registered for VAT in Germany and has been assigned a German VAT number, your business is required to start complying with the local regulations in certain situations. This would mean:

  • To issue invoices with the details required by German law.
  • Electronic invoices upon agreement with the recipient in which the signature and authenticity of its contents are guaranteed.
  • Keeping of invoices and files for at least 10 years.

If your company or business needs to register for VAT in Germany and be assigned a German VAT number, do not hesitate to contact our VATONTIME team. We will be more than happy to help you.