Germany’s VAT system is based on the EU VAT Directive and was enacted into law by the 1980 Value Added Tax Act (UStG) and VAT Implementation Regulation (UStDV). Germany’s standard VAT rate is 19%.
The German Value Added Tax Act (“VATA”) is harmonized with the rest of EU’s VAT system.
Everything you need to know about VAT in Germany such as VAT Registration, Returns, Tax Representation (if applicable), and your legal duties in Germany, is conveniently located right here!
VAT is a tax that is levied on the majority of business-to-business and business-to-consumer transactions in all of the European Union’s member states and an increasing number of other nations. It is vital for cross-border commerce that businesses maintain compliant VAT registration profiles and that VAT obligations are met accurately and on time.
VAT is charged on the following types of transactions:
• A taxable person’s provision of goods or services in Germany.
• A taxable person’s intra-Community procurement of goods from another EU Member State.
• Reverse-charge supplies, which include both services and goods that require installation.
• A taxable person’s self-supply of goods and services.
• The importation of items from outside the EU, regardless of the importer’s status.
Taxable persons include:
• Independent entities who carry out economic activity.
• Non-commercial entities such as public bodies carrying out an economic activity of commercial value.
|National Legislation||German Ministry of Finance|
|VAT in local language||Umsatzsteuer/Mehrwertsteuer (USt-IdNr.)|
|German VAT number format
|VAT rates in Germany
|Standard 19%; Reduced 7%|
|Zero-rated (0%) and exempt|
|Frequency||Monthly, quarterly, and annual returns|
|Registration in Germany|
|Intra-Community acquisitions||EUR 12,500|
|Intra-EU Distance sales and electronically supplied services to consumers (OSS)||EUR 10,000|
|Recovery of VAT by non-established businesses||Yes|
Compliance Returns and Deadlines
|German VAT Returns||10th day following the end of the filing period|
|European Sales Listing||25th day following the end of the filing period|
|Intrastat||10th day following the end of the filing period|
|Annual Return||On or before July 31 of the year following the annual reporting period (may be extended under some conditions)|
The regulations in connection with the e-commerce on the extension of the so-called mini One Stop Shop (MOSS) to a One Stop Shop (OSS) should come into force on 1 April 2021, however, businesses should apply from July 1st 2021
This process is provided to telecom companies who are resellers of their services and it was introduced in order to avoid the creation of fraud schemes.
The input tax deduction was claimed on the issued sales invoice by a company where the taxpayer was also providing funds. However, the tax office rejected the deduction, claiming that the payment was a non-taxable grant. The court allowed the deduction during the appeal.