VAT in Germany

Are you sending goods to customers in Germany? Check if you should register for the German VAT system and find out the VAT rates in Germany.

VAT in Germany - table of contents:

VAT in Germany was introduced in 1968, and its principles were based on the rules prevailing in the European Union. The German Ministry of Finance oversees matters related to VAT.

Foreign companies or non-resident entrepreneurs providing services or delivering goods to local businesses/consumers in Germany may be required to register their business for VAT. Consequently, they will need to comply with German VAT regulations, including invoicing, VAT rates, and remitting the applicable German VAT.

Should you register for German VAT?

Certain business situations typically require a foreign entrepreneur to register with the German tax office. They align with the general EU VAT principles and include:

movement of goods between Germany and other EU member states (intra-Community supplies), both in the form of sales (dispatches) and purchases (arrivals),
buying and selling goods in Germany,
storage of goods in consignment warehouse,
organizing exhibitions, events, or live training in Germany,
if a company is not a VAT taxpayer but uses services in Germany under the reverse charge principle,
independent delivery of goods,
sale of services and distance selling of goods over the internet to consumers in Germany exceeding the equivalent of 10,000 EUR.

IMPORTANT!

Entrepreneurs providing services and selling goods online to consumers in the EU, whose turnover from these sales exceeds 42,000 PLN (for all countries), instead of registering for German VAT, can register for VAT OSS.

Format of German VAT number

The general format of a VAT number is: DE 123456789.

The tax office divides the VAT number into two parts: one for VAT reporting and general correspondence purposes, and the other for identification purposes for companies involved in cross-border transactions within the EU (intra-community supplies).

Country code: DE

Number of characters: 9

Format: DE 123456789

How to obtain a German VAT number?

The application for a VAT number must be submitted to the relevant tax office. This office depends on the location of the foreign company’s headquarters. Companies from outside the EU that wish to register need to submit their application to the tax office in Berlin.

The tax office requires providing the applicant’s information, as well as typically a copy of the partnership agreement. The tax office may ask additional questions if the company has a limited trading history and/or deals with goods susceptible to VAT fraud.

RATE	TYPE	TYPE OF GOODS OR SERVICES
19%	standard	all goods and services not covered by lower VAT rates,
7%	reduced	some food products, water supply articles (excluding bottled water), medical equipment for people with disabilities, some national passenger transportation, intra-community and international passenger transportation in certain types of road, rail, and inland waterway transportation, books (excluding books with content harmful to minors), e-books, audiobooks, newspapers and magazines (excluding newspapers containing harmful content for minors and/or over 50% advertisements), admission to cultural events, writers and composers, some agricultural production resources, accommodation in hotels (exclusively short-term), some admissions to sports events, social services, medical and dental care, firewood, some types of wood for industrial purposes, takeaway food, cut flowers and plants for decorative purposes and food production, taxation of certain gold coins and jewelry,
0%	zero	intra-Community and international transportation (excluding road and rail transportation, as well as certain types of inland water transportation).

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Author: Lucy Adams
She has extensive knowledge in the field of accounting and constantly gains experience working for both small businesses and larger corporations. Her mission is to explain complex financial and accounting issues and teach business owners and those interested in the subject how to manage their finances effectively. She enjoys giving practical advice, discussing current accounting issues, and analyzing legislative changes that may affect business operations. She enjoys a straightforward approach to finance that helps entrepreneurs focus on growing their businesses. She translates complex issues into easy-to-understand language so that anyone can confidently make decisions that impact the success of their business.
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