German VAT recovery

For foreign companies doing business in Germany, there is the likelihood that they will incur German VAT which they will not be able to recover through their own local VAT or tax returns.

Claims may be submitted on a quarterly basis, with a fifth, final claim which can be in the following year.

How do EU companies reclaim German VAT

Companies established in another EU country can reclaim any German VAT through the EU 8th Directive VAT system.  The system for the reclaim of German VAT for companies from other EU companies was overhauled and simplified in 2010.

EU companies can now submit German VAT recovery applications through an online portal operated by their national tax authority.  This is then processed and submitted to the relevant national authority who must refund the VAT directly to the company.  The deadline for submissions is 30 September of the year following the year in which the invoice was raised.

How do non-EU companies reclaim German VAT

Non-EU companies use a slightly different process for VAT recovery in Germany – the 13th VAT Directive.  Non-EU companies, must first ensure that there is a tax reciprocity agreement between Germany and their home territory.  If not, then no Germany VAT may be reclaimed.

If there is reciprocity, the business can complete and submit a special German form to the tax authorities.  This should generally be accompanied by supporting original invoices, plus a local tax certificate.  German VAT reclaims must be submitted by the 30 June of the year following the year in which the invoice was raised.  If this deadline is missed, then the VAT is lost.

What type of German VAT can be recovered?

Under the EU’s free market principles, foreign companies are permitted to reclaim any VAT incurred as a resident German company.

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

EU request ending of German F22 VAT Certificate marketplace obligation

Oct 11, 2019 

The EU Commission (EC) has today sent to Germany a notice of formal notice to withdraw its 2019 requirement for EU and non-EU sellers on marketplaces to obtain an F22 VAT Certificate.

Germany cuts rail VAT

Sep 22, 2019

Germany has announced a reduction in the VAT rate applied on train journeys from the standard rate 19% to the 7% reduced VAT rate. The measure is part of a range of proposals to reduce the environment

Germany VAT certificates for EU sellers Oct 2020

Sep 7, 2019

EU online retailers selling to German consumers must provide any marketplaces they are active on with a VAT Certificate (Bescheinigungen nach § 22f UStG) from the German tax office, Finanzamt.