VAT tax in Germany is one of the main obligations for entrepreneurs. If you’re one of them and want to expand your business on German market, learn the details of registration, rates and filing declarations. Below we present the necessary information about VAT in Germany, which will also be useful for the e-commerce market.
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VAT tax in Germany – What is It?
VAT, or value-added tax (German: Mehrwertsteuer, MWSt), is an indirect tax on goods and services. It is an important element of the tax system in Germany. As in Poland, VAT tax in Germany is charged at every stage of the supply chain, but the final cost is borne by the end consumer.
VAT Rates in Germany in 2024
There are several different VAT rates in Germany, depending on the type of goods or services.
In 2024, the following VAT rates apply:
- standard VAT rate: 19%. It applies to most goods and services, both domestically and internationally.
- reduced VAT rate: 7%. It applies to selected products and services, such as food, books, newspapers, certain medical products and tickets to cultural events.
| VAT Rate Type | Rate | Examples of Goods/Services |
| Standard VAT rate | 19% | Electronics, clothing, household appliances, construction services |
| Reduced VAT rate | 7% | Food, books, tickets to cultural events, prescription drugs |
| Zero rate (exemption) | 0% | Export of goods outside the EU, certain educational services |
VAT Registration in Germany
Any entrepreneur doing business in Germany or selling goods to this country may be required to register VAT tax in Germany. There are two key situations in which you need to register for VAT tax in Germany:
- Business in Germany. If the company sells goods or services in Germany, it must register for VAT with the German tax office (Finanzamt);
- Distance selling to Germany (e-commerce). Non-German companies that sell goods to German consumers must register for VAT in Germany when their turnover exceeds the annual limit of 10 000€. From 1 July 2021, it is a common limit for the whole EU. In such a case, the seller must obtain a German VAT number and settle the sales tax.
German VAT Number
After completing the registration, entrepreneurs receive a German VAT number (Umsatzsteuer-Identifikationsnummer). This is a unique identification number that allows you to settle VAT in Germany. The VAT number must be correctly placed on invoices. Its absence may result in problems with settlements and tax audits.
In Germany, VAT is settled monthly, quarterly or annually. This depends on the company’s turnover.
VAT Declaration in Germany
Entrepreneurs registered for VAT in Germany must submit VAT declarations (Umsatzsteuervoranmeldung) regularly. Depending on the amount of turnover, declarations may be submitted:
- monthly – mandatory for companies whose VAT exceeded 7 500 EUR in the previous tax year;
- quarterly – for companies with VAT between 1 000 EUR and 7 500 EUR;
- per year – if the VAT was less than 1 000 EUR in the previous year.
VAT declarations must be submitted electronically. The deadline for their submission depends on the selected settlement period. For monthly and quarterly declarations, it is the 10th day of the month following the end of the period. It is worth noting that it is possible to extend the VAT return submission deadline by one month. This may happen if the entrepreneur applies for it in the tax office.
When do You Need a VAT Registration in Germany?
If you sell goods or services to customers in Germany, you have to make sure that you meet the requirements for VAT registration. Below are the main cases in which VAT registration in Germany is necessary.
| Situation | Obligation to Register VAT in Germany |
| Doing business in Germany. | Yes |
| Exceeding the 10 000€ limit for e-commerce sales to Germany. | Yes |
| Selling goods or services to companies in Germany. | Depends on the form of business and type of goods/services. |
| Export of goods from Germany to countries outside the EU. | No, zero rate on export. |
VAT tax in Germany in 2024 – Summary
VAT tax in Germany in 2024 is crucial for both local and e-commerce businesses. It is worth paying special attention to the obligation to register VAT, especially in the case of distance sales to Germany. The annual limit for such transactions is 10 000 EUR. Entrepreneurs must remember to submit VAT declarations on time. They should be also aware of the applicable tax rates. The standard rate is 19% and the reduced one is 7%, depending on the type of goods and services.
Do you have questions about VAT tax in Germany? Do you want help registering or filing your VAT returns? Contact us! Our experts will help you go through the registration and VAT settlement process easily. Let’s make sure that you are operating in compliance with the applicable tax regulations!
FAQ – Frequently Asked Questions about VAT tax in Germany
What are the VAT rates in Germany in 2024?
The standard VAT rate in Germany is 19%, and the reduced rate is 7%. There is also a zero rate for the export of goods outside the European Union.
When do I need to register for VAT in Germany?
VAT registration in Germany is obligatory if you do business in Germany or if you exceed the annual limit of 10 000 EUR for e-commerce sales to Germany.
What does VAT registration in Germany look like?
You can proceed with VAT registration in Germany at the local tax office (Finanzamt). The entrepreneur must submit the required documents. Then, the tax office issues a German VAT number.
What are the deadlines for filing VAT returns in Germany?
VAT returns can be submitted monthly, quarterly or annually. It depends on the company’s turnover. The due date is usually the 10th day of the month following the settlement period.
How do I get a German VAT number?
You can obtain a VAT number by registering VAT with the German tax office This is a unique identifier necessary for correct VAT settlement.
What is a reduced VAT rate in Germany?
The reduced VAT rate in Germany is 7%. It applies to food, books, tickets to cultural events and certain medical products.
Are exports of goods from Germany subject to VAT?
Exports of goods from Germany outside the EU are taxed at a zero rate. It means that no VAT has to be paid, but the transaction must be properly documented.
What are the penalties for not registering VAT in Germany?
Failure to register VAT in Germany may result in financial penalties. It can also result in the obligation to pay overdue VAT with interest.
Can you apply for a VAT refund from Germany?
Yes. Companies outside of Germany can apply for a VAT refund for goods and services purchased in Germany. Yet they have to meet the relevant conditions.
How long does it take to register for VAT in Germany?
The VAT registration time in Germany depends on the workload of the tax offices. Usually, the process takes from few weeks to a month.