VAT Germany

VAT in Germany

Value Added Tax (VAT/Umsatzsteuer) is one of the most important taxes in Germany and affects almost all business transactions. For foreign companies, proper VAT compliance is often challenging, especially in e-commerce and cross-border trade.

VAT Rates

Rate	Application
19%	Standard rate for most goods and services
7%	Reduced rate: Food, books, newspapers, hotel stays, passenger transport
0%	Exemptions: Exports, intra-Community supplies, certain financial/insurance services

When is VAT Registration Required?

1. Goods Supplied from German Warehouse

If you ship goods from a warehouse in Germany to customers, you are VAT liable in Germany - regardless of the destination country.

• Amazon FBA: Storage at Amazon in Germany = VAT liability
• Fulfillment Centers: Any German warehouse creates tax liability
• Consignment Stock: Also requires registration (with simplifications)

2. Distance Sales

Since July 2021, an EU-wide threshold applies for B2C distance sales:

Situation	Threshold	Registration Requirement
Below Threshold	< €10,000 EU-wide	VAT in country of origin
Above Threshold	≥ €10,000 EU-wide	VAT in destination country (via OSS or local registration)

3. Intra-Community Acquisition

When you as a business bring goods from other EU countries to Germany, these are subject to intra-Community acquisition.

4. Services

• B2B: Usually reverse charge - recipient accounts for VAT
• B2C: Depending on type: supplier location or place of consumption
• Electronic Services: At customer location (OSS/IOSS possible)
• Events: At event location

VAT ID and Tax Number

VAT Identification Number (VAT ID)

Feature	Details
Format	DE + 9 digits (e.g., DE123456789)
Issuing Authority	Federal Central Tax Office (BZSt)
Purpose	Intra-Community trade
Processing Time	4-8 weeks

Tax Number

• Format: Varies by federal state (e.g., XX/XXX/XXXXX)
• Responsibility: Local tax office
• Purpose: Tax returns, advance returns

Registration Process

For EU Companies

1. Questionnaire: Tax registration with competent tax office
2. Documents: Commercial register extract, power of attorney, business evidence
3. VAT ID Application: Separate application to BZSt
4. Processing Time: 4-8 weeks
5. Result: Tax number + VAT ID

For Third-Country Companies

• Fiscal Representative: Generally required
• Exceptions: Reciprocity agreements (e.g., USA, UK under conditions)
• Additional Documents: Apostilled documents, translations
• Bank Guarantee: May be required

Ongoing Obligations

VAT Advance Returns

Prior Year VAT	Filing Frequency	Deadline
> €7,500	Monthly	10th of following month
€1,000 - €7,500	Quarterly	10th of following month
< €1,000	Annually	July 31 of following year
New Business	Monthly (first 2 years)	10th of following month

Other Reporting Obligations

• EC Sales List: Monthly for IC supplies/services
• Annual Return: By July 31 of following year
• Intrastat: For goods movement above thresholds (Arrivals: €800,000, Dispatches: €500,000)

One-Stop-Shop (OSS)

The OSS is a simplified procedure for EU-wide B2C sales:

Benefits

• One registration instead of many national registrations
• Quarterly reporting of all EU B2C sales
• Central payment to one authority
• Simplified compliance

Scope

• Union OSS: Intra-Community distance sales, electronic services B2C
• Non-Union OSS: For third-country businesses for services
• IOSS: For goods imports up to €150 value

OSS Returns

Period	Filing Deadline
Q1 (Jan-Mar)	April 30
Q2 (Apr-Jun)	July 31
Q3 (Jul-Sep)	October 31
Q4 (Oct-Dec)	January 31

E-Commerce and Platform Taxation

Marketplace Liability

Since 2019, online marketplaces (Amazon, eBay, etc.) are liable for unpaid VAT of their sellers if they are not properly registered.

Certificate under §22f UStG

• Required: For every seller on German marketplaces
• Issued By: Competent tax office
• Validity: 3 years
• Consequence if Missing: Possible suspension by marketplace

Reverse Charge Procedure

Under reverse charge, the recipient owes the VAT:

• B2B Services: Between EU businesses
• Construction Services: §13b UStG
• Certain Goods: Mobile phones, tablets, precious metals
• Advantage: No VAT registration of supplier required

Input VAT Deduction and Refund

Input VAT Deduction

VAT paid in Germany can be deducted as input VAT if it relates to taxable supplies.

VAT Refund Procedure

For businesses not established in Germany without VAT-liable sales:

• EU Businesses: Electronic refund procedure via home country
• Third-Country Businesses: Direct application to BZSt (reciprocity required)
• Deadline: September 30 of following year
• Minimum Amount: €50 (annual) / €400 (interim)

Avoiding Common Mistakes

• Late Registration: Leads to back payments and interest
• Wrong Tax Rates: Check for each product/service
• Missing Evidence: For IC supplies and exports
• Ignoring OSS Threshold: Monitor the €10,000 limit
• Invoice Details: Observe all mandatory information

Our Services

• VAT Registration: Registration with tax office and BZSt
• Advance Returns: Monthly/quarterly preparation and filing
• OSS Registration: Registration and ongoing returns
• Fiscal Representation: For third-country companies
• VAT Refund: Application and processing
• Compliance Check: Review of existing structures