German VAT reverse charge
To help reduce the VAT compliance burden for EU companies trading in Germany (and all EU member countries) a VAT compliance simplification mechanism, the ‘reverse charge’, is used. This allows the recording of any German VAT transactions to be pushed to the recipient of the goods or services. This then means the foreign supplier has no need VAT register in Germany.
When is the German VAT reverse charge used?
The reverse charge mechanism is applied in the following circumstances:
- The supply of services to a German VAT registered business (2010 VAT package).
- Supply and install contracts.
- Supply of certain types of power.
- Other various minor goods.
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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