VAT in Germany:
key VAT information

Value Added Tax (VAT), known as Mehrwertsteuer (MwSt.) in Germany, is a consumption tax levied on the sale of goods and services. It is applied at each stage of the supply chain where value is added, from production to the final sale to the consumer.

Standard rate (19%): applied to most goods and services. Reduced rate (7%): applied to specific items such as food, books, newspapers, medical equipment and cultural services. Zero rate (0%): certain transactions, such as intra-Community supplies and exports outside the EU, may be exempt from VAT.

Arrivals (imports from EU countries): €3,000,000 per calendar year. Dispatches (exports to EU countries): €1,000,000 per calendar year. Businesses exceeding these thresholds must submit monthly INTRASTAT declarations providing statistical data on the movement of goods.

INTRASTAT declarations: mandatory statistical reports for businesses exceeding the INTRASTAT thresholds, detailing the movement of goods between Germany and other EU countries. EC Sales List: a report required for businesses supplying goods or services to VAT-registered customers in other EU countries, listing all intra-Community sales.

Monthly returns: if the VAT due in the previous year exceeded EUR 7,500. Quarterly returns: if the VAT due in the previous year was between EUR 1,000 and EUR 7,500. Annual return: all VAT-registered businesses must submit an annual return summarising the year's activities. Newly registered businesses are generally required to file VAT returns monthly during the first year.

Businesses must keep records for 10 years, including: issued and received invoices, accounting records and ledgers, import and export documents, as well as VAT returns and related correspondence. These documents must be kept in such a way that they are readily accessible to the tax authorities upon request.

Invoices must include: the full names and addresses of the supplier and the customer, the supplier's German VAT identification number, the invoice date and a unique invoice number, the quantity and description of the goods or services, the delivery date (if different from the invoice date), the net amount per item and the total net amount, the applicable VAT rate(s) and the corresponding VAT amount(s), as well as the total amount payable (VAT included).

Businesses can recover German VAT paid on business expenses by: including it in their periodic VAT returns (for businesses registered for VAT in Germany); submitting a refund claim through the EU VAT refund mechanism (for EU businesses not registered in Germany); or using the 13th Directive refund procedure (for non-EU businesses), provided that a reciprocity agreement exists.

Non-EU businesses that must register for VAT in Germany are required to appoint a German fiscal representative. This representative is responsible for managing all VAT obligations on behalf of the non-EU business, including registration, returns and communication with the German tax authorities.

Fiscal representative: legally responsible for the VAT obligations of non-EU businesses, potentially jointly and severally liable for any unpaid VAT. Tax agent: acts on behalf of the business for VAT compliance but is not jointly and severally liable. Typically used by EU businesses operating in Germany.

To register for VAT in Germany: complete the VAT registration form (Fragebogen zur steuerlichen Erfassung); provide the necessary documents such as the company's registration certificate, articles of association and identification documents; submit the application to the local tax office (Finanzamt) where your business is established or operates.

E-commerce businesses selling goods to consumers in Germany must collect German VAT if their sales exceed the EU-wide distance selling threshold of €10,000. Since 1 July 2021, the One-Stop Shop (OSS) system allows businesses to declare and pay VAT for all EU sales through a single registration.

The OSS simplifies VAT reporting for businesses selling goods and services across the EU: it allows a single VAT registration covering all EU member states; businesses can file a single quarterly OSS VAT return for all sales to EU consumers; the scheme applies to distance sales of goods and to certain domestic supplies facilitated by electronic interfaces.

Digital services supplied to non-taxable persons (consumers) in Germany are subject to German VAT, regardless of the supplier's location. Suppliers can declare VAT on these services using the OSS system for EU businesses, or the Non-Union OSS for non-EU businesses.

Imports: goods imported into Germany from non-EU countries are subject to import VAT and customs duties. Import VAT can be recovered through the VAT return if the business is registered for VAT in Germany. Exports: exports to non-EU countries are exempt from VAT, meaning no VAT is charged, but proof of export must be kept.

Storing goods in Germany generally triggers an obligation to register for German VAT. Businesses holding stock in Germany for sale or distribution must register for German VAT, charge German VAT on sales and comply with local VAT reporting requirements.