VAT in Germany

1. What is the VAT in Germany?

VAT in Germany is also known as “Umsatzsteuer”. The standard rate for Value Added Tax in Germany is 19%. However, the law in Germany stipulates that some goods and services may benefit from a reduced VAT rate of 7%. The VAT reduced rate usually refers to food and agricultural products. Imports are also subject to VAT in Germany, while overseas exports are exempted from VAT.

2. How can the VAT be refunded in Germany?

VAT can be refunded in Germany on the basis of an application filed by any person who has registered for VAT. The claim can be submitted to the tax authorities at the local office, or it can be sent electronically no later than 30th September of the year following the refund period. Together with the application, a list of invoices must also be submitted. Tax authorities in Germany must make a decision regarding the application within four months and ten days after submission. The refund period can be at least three months, but no more than one year. The minimum amount for refund for one year is 25 EUR. VAT cannot be refunded for fuel and goods or services not used in business purposes.

3. How can I register for VAT in Germany?

Registration for VAT is not compulsory in Germany. Companies which activate in the field of selling services or making deliveries must however register for VAT in Germany. Companies with a turnover less than 16,650 EUR or with an expected turnover less than 50,000 EUR may choose not to register for VAT purposes. Registration procedure includes an application from the founders, together with some documents that must be provided. It is necessary to enclose the registration certificate, information on the directors and the form of organization of the company. Moreover, the company’s activity and the expected turnover should also be mentioned. The registration is complete when the VAT number is provided by the central tax authority.

4. How does intra-community VAT work in Germany?

A company in Germany which supplies goods for another company in an EU member state does not have to pay VAT if the receiver is a company with a VAT registration number, the goods are acquired for business purposes and the receiver is subject to VAT in his own country. Companies that take part in an intra-community trade are given separate VAT registration numbers from the Federal Central Tax Office in Germany.

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