German VAT Returns & Recovery
All businesses registered for VAT in Germany, whether based domestically or internationally, must periodically provide initial VAT statements detailing taxable activities and reverse charge bills.
While the standard procedure is to submit these preliminary VAT statements monthly, based on the annual VAT payment frequency, the tax authorities might permit quarterly or yearly submissions.
GVC can automate your VAT returns with our unique VAT return preparation tool Parlez™. Contact GVC for your VAT Compliance in Germany.
VAT Returns in Germany
In cases where a company provides monthly or quarterly initial VAT reports, an end-of-year “final” VAT return for that calendar year is also mandatory.
VAT returns – Filing deadline
In Germany, monthly or quarterly VAT returns need to be submitted by the 10th of the following month after the reporting period concludes. If a preliminary payment is made to the tax officials, you can request a continuous deadline extension. This extended timeframe allows for an additional month to submit the obligatory VAT return. To avail of this delay, you must provide a valid reason for its need.
Interest and Penalties
In Germany, there are various penalties that may be imposed for tax-related offenses, such as late filing or payment of taxes, or failing to comply with reporting requirements. Penalties may include fines, interest charges, and administrative fines, and may be levied by different authorities depending on the type of offense.
Interest
If a taxable person in Germany underpays VAT or recovers input VAT incorrectly, they are obligated to pay interest at a rate of 0.5% per month. This interest accrual period commences under Section 233a of the German Fiscal Code after 15 months from the end of the calendar year in which the tax liability arose.
Penalties
- Late filing of VAT return: penalty up to 25,000 euros (152, General Fiscal Code)
- Late filing of annual VAT return: penalty of 0.25% of VAT owed (minimum 10 euros/month, rising to 25 euros/month for annual filing); maximum penalty of 25,000 euros
- Late payment penalty: 1% of outstanding amount for each month of delay after grace period of 3 days (Article 240, General Fiscal Code)
- Omitted, incomplete or late payment is an administrative offense under 26a(1) of VAT Act and may result in administrative fine of 30,000 euros.
Selling into Germany?
VAT Recovery
Taxable individuals have the ability to reclaim input tax from the authorities. Input tax refers to the VAT charged on goods and services provided to them for taxable business activities (which are then utilized to offer taxable services or products as output). However, there are certain exceptions to this principle. Typically, to retrieve the input tax, a taxable individual offsets it against the output tax, which represents the VAT applied to their provided supplies.
Among the types of input tax are:
- VAT charged on goods and services supplied in Germany.
- VAT paid on imports of goods.
- VAT assessed self-assessed intra-Community acquisitions of products.
- VAT charged on purchases of goods and services taxed under the reverse-charge procedure.
German VAT Refunds
Deadline for refund claims:
- EU – 30 September of the year following the year in which the invoice was received by the claimant.
- Non–EU – 30 June of the year following the year in which the invoice was received by the claimant.
Filing Procedures:
EU
- EU businesses are required to submit refund claims electronically to their local tax authorities, which then forward the claims to the German Federal Tax Office (BZSt).
- The electronic form is presented in the language of the business’s home country. However, any subsequent communications from the BZSt will be in German.
- Claims should have a minimum value of EUR400, while yearly claims should be at least EUR50. It’s no longer necessary to provide the original VAT invoices.
- If the net value exceeds EUR1,000 or if the fuel invoice’s net value surpasses EUR250, electronic copies must be attached.
- In specific scenarios, the BZSt may request to view the original invoices or their copies.
- Usually, the BZSt is expected to refund the VAT within four months from the claim’s submission date. Refunded amounts accrue interest at 0.5% per month, starting four months and ten days after the BZSt has received the claim.
Non-EU
- Claims should be submitted in German, accompanied by the essential documentation (refer to the EU chapter for details).
- The claimant is required to provide a Certificate of Taxable Status, confirming their registration as a taxable individual with a tax identification number.
- Claims should have a minimum value of EUR1,000, with annual claims not less than EUR500.
- The provided certificate shouldn’t be older than a year. Moreover, the German VAT officials might send a questionnaire to confirm that the claimant isn’t obliged to register for VAT in Germany, as an alternative to following the EU 13th Directive method.
- The application must bear the signature of the legal representative. Signatures from others won’t be accepted, and claims can be rejected on this ground.
- Non-EU businesses applying for VAT refunds in Germany should send their applications to: Bundeszentralamt für Steuern Dienstsitz Schwedt Passower Chaussee Passower Chaussee 3b D-16303 Schwedt/Oder Germany.For electronic returns and claims to a German tax authority, a qualified electronic signature is required.
Last Updated: 27/09/2023
Disclaimer
The information provided by Global VAT Compliance B.V. on this webpage is intended for general informational purposes only. Global VAT Compliance B.V. is not responsible for the accuracy of the information on these pages, and cannot be held liable for claims or losses deriving from the use of this information. If you wish to receive VAT related information please contact our experts at support@gvc.tax
