Germany introduced Value Added Tax in 1968. The rules on , and are based on European Union which German has transposed into its VAT Act. The tax is administered by the Ministry of Finance.
Foreign companies, or ‘non-resident’ traders, providing goods or services in Germany to local businesses or consumers may have to register their business for German VAT. They will then have to follow the German VAT compliance rules, including invoicing and VAT rates, as well as pay over any German VAT due.
Should you register for German VAT?
There are a number of trading situations which typically require a foreign trader to register with the German tax authorities. These follow the broad EU VAT rules, and include:
- Importing goods into Germany from another country, either from within the EU or from outside the EU
- Moving goods between Germany and other EU member states (intra-community supplies), either as sales (dispatches) or purchases (arrivals)
- Buying and selling goods in Germany
- Selling goods over the internet to German consumers, subject to the German distance selling VAT regisration threshold
- Goods held in consignment stock
- Holding live exhibitions, events or training in Germany
- If a company is otherwise a non-VAT trader, but is receiving services in Germany under the reverse charge rule
- The self supply of goods
Few companies need to VAT register if they are providing services to local German companies, and instead can use the Reverse Charge process. This is based on the 2010 VAT Package changes.
Note that providers of electronic, broadcast or telecoms services to consumers in Germany only have to VAT register in one EU country under the MOSS scheme to file a single return covering all 28 member states.
If you do need to VAT register, read our German VAT registration briefing to understand the requirements, including the VAT registration thresholds. You can read more about German VAT returns too.
There may be further exemptions from the requirement to VAT register in Germany you should consider. Please read our German VAT Reverse Charge briefing.
Need help with your German VAT compliance?
Researching German VAT legislation is the first step to understanding your VAT compliance needs. Avalara has a range of solutions that can help your business depending on where and how you trade.
Latest German news
February 22, 2019
The German Bundesministerium der Finanzen has delayed to 15 April 2019 the requirement for online marketplaces to have captured their third-party sellers’ new Tax Certificates. The marketplace USt 1 TI Tax Certificate confirms the VAT registered status of non-resident online sellers. From 1 March 2019, all non-EU sellers were to have these granted and passed to the marketplaces.
January 25, 2019
The European Commission (EC) has proposed switching from unanimous to majority voting on EU VAT and other tax policies. The aim is to progress fiscal reforms which face immovable opposition from just a limited number of member states.
January 17, 2019
The German tax authorities will require sellers using online marketplaces to register for a new tax compliance certificate, ‘F22’. It will apply to non-EU sellers from 1 March 2019, and EU sellers from 1 October 2019.
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