1. What VAT rate applies in Germany?
As of 1st January 2007 the regular VAT rate is 19 % in Germany. The reduced VAT rate is 7 % in Germany. For a transitional period from 1 July 2020 to 31 December 2020, the VAT rates were 16% and 5%.
2. What is a VAT-Identification number?
A VAT-Identification number (VAT-ID-No.) is relevant for the supply of goods and services within the European Union. Tax payers who are registered in Germany receive a VAT-ID-No. from the German Federal Central Tax Office (Bundeszentralamt für Steuern) in Saarlouis. A VAT-ID-No. is issued in addition to a tax registration number, which is issued by the local tax office. A VAT-ID-No. is also necessary for reporting intra-Community supplies of goods and services (European sales lists). Moreover, a VAT-ID-No. can be used as proof of status as a taxable person and can be stated on invoices instead of the tax registration number of the supplier.
3. What is the deadline for filing VAT returns?
Preliminary VAT returns have to be filed by the 10th day after the end of the respective filing period. Basically, preliminary VAT returns must be filed quarterly. Where the VAT liability in respect of the previous year exceeds EUR 7,500.00, preliminary VAT returns must be filed each calendar month. In the instance of a company which has commenced its business during the course of the year, the filing period is basically the calendar month in the year in which the business activity began and the following calendar year. In the case where an entrepreneur receives a VAT refund of more than EUR 7,500.00 in the previous calendar year, the entrepreneur can choose to file monthly. If the VAT liability of the previous calendar year was not more than EUR 1,000.00, the entrepreneur can apply to become exempt from filing preliminary VAT returns and instead only be required to file annual VAT returns. The deadline for filing preliminary VAT returns can be extended by one month if an application for extension of the time limit is made. A special down payment to the tax authorities may become necessary. Irrespective of preliminary VAT returns, an annual VAT return has to be filed by the 31st May of the following calendar year. If the annual VAT return is filed by a tax advisor, this deadline for filing is extended until 31st December of the following calendar year.
4. What is a European sales list (Zusammenfassende Meldung)?
Every entrepreneur has to report its intra-Community supplies in a European sales list. As of 1st January 2010 this also applies for VATable (not VAT exempt) services supplied to entrepreneurs established in other Member States of the European Union, provided that these services are subject to reverse charge according to Art. 44 of the EU VAT Directive. The purpose of the European sales list is to monitor whether or not the recipient of an intra-Community supply or an intra-Community service has properly reported the VAT in the country of destination.
5. What is the deadline for filing a European sales list?
The European sales list has to be filed electronically by the 25th day of the month following the return period. Any exemption granted, in terms of the filing deadline, which has been granted for filing the preliminary VAT returns does not apply to the filing of the European sales lists. The return period is basically the quarter of the calendar year. However, intra-Community supplies of goods have to be reported monthly if their amount exceeds EUR 50,000.00 per quarter. In this case, the entrepreneur can choose whether or not he also wishes to declare his intra-Community supplies of services on a monthly basis. If so, the German Federal Central Tax Office (Bundeszentralamt für Steuern) has to be informed in advance. Where the local tax office has exempted the entrepreneur from filing preliminary VAT returns, he can file the European sales list until the 25th day after the end of the calendar year. This, however, requires that the total net amount of turnover has not exceeded EUR 200,000.00 in the previous calendar year and the current calendar year, and that the net amount of transactions to be reported in the European sales list does not exceed EUR 15,000.00.
6. What is an Intrastat return?
Intrastat returns report the supplies of goods between Member States of the European Union and are used for statistical purposes. Entrepreneurs have to report intra-Community supplies as well as intra-Community acquisitions and further intra-Community dispatches of goods in Intrastat returns in instances where the threshold (in Germany currently EUR 500,000 for dispatches and EUR 800,000 for arrivals) is exceeded. Separate returns have to be filed for arrivals and dispatches. The Intrastat returns have to be filed electronically by the 10th business day of the month following the return period.
7. How do I file VAT returns?
Preliminary VAT returns and the anual VAT return have to be filed electronically and in the official form released by the German Ministry of Finance. The entrepreneur is also required to calculate his own total VAT liability or total VAT refund.
8. When do I have to pay VAT?
Where a preliminary VAT return results in a VAT liability arising, the VAT has to be paid by the 10th day following the filing period. In the case where an extension of the filing deadline has been granted, the VAT is due one month later.
Where an annual VAT return results in a VAT liability, the VAT basically has to be paid within one month after receipt of the VAT return by the tax office.
9. Which is the competent tax office?
For entrepreneurs established in Germany, usually the tax office of the district in which the entrepreneur carries out its business is competent. For foreign entrepreneurs, German VAT laws stipulate respective rules of competence, depending on the country where the foreign entrepreneur is established:
- Austria: Tax Office München
- Belarus: Tax Office Magdeburg
- Belgium: Tax Office Trier
- Bulgaria: Tax Office Neuwied
- Croatia: Tax Office Kassel-Hofgeismar
- Czech Republic: Tax Office Chemnitz-Süd
- Denmark: Tax Office Flensburg
- Estonia: Tax Office Rostock
- Finland: Tax Office Bremen
- France and Monaco: Tax Office Offenburg
- Greece: Tax Office Berlin Neukölln
- Hungary: Central Tax Office Nürnberg
- Ireland: Tax Office Hamburg-Nord
- Italy: Tax Office München
- Latvia: Tax Office Bremen
- Liechtenstein: Tax Office Konstanz
- Lithuania: Tax Office Mühlhausen
- Luxembourg: Tax Office Saarbrücken Am Stadtgraben
- Macedonia: Tax Office Berlin Neukölln
- Netherlands: Tax Office Kleve
- Norway: Tax Office Bremen
- Poland: Tax Office Hameln (entrepreneurs, whose surnames or company names begin with the letters A through to G)
- Poland: Tax Office Oranienburg (entrepreneurs, whose surnames or company names begin with the letters H through to L)
- Poland: Tax Office Cottbus (entrepreneurs, whose surnames or company names begin with the letters M through to R)
- Poland: Tax Office Nördlingen (entrepreneurs, whose surnames or company names begin with the letters S through to Z)
- Portugal: Tax Office Kassel-Hofgeismar
- Romania: Tax Office Chemnitz-Süd
- Russia: Tax Office Magdeburg
- Sweden: Tax Office Hamburg-Nord
- Switzerland: Tax Office Konstanz
- Slovakia: Tax Office Chemnitz-Süd
- Spain: Tax Office Kassel-Hofgeismar
- Slovenia: Tax Office Oranienburg
- Turkey : Tax Office Dortmund-Unna
- Ukraine: Tax Office Magdeburg
- United Kingdom and Isle of Man: Tax Office Hannover-Nord
- USA: Tax Office Bonn-Innenstadt
- The complete address of the supplier as well as the recipient;
- The tax registration number of the supplier issued by the local tax office or the VAT-ID-No. of the supplier issued by the German Federal Central Tax Office (Bundeszentralamt für Steuern);
- In the case of intra-Community supplies or intra-Community services according to § 3a para 2 UStG (Art. 44 EU VAT Directive) where reverse charge applies, the VAT-ID No. of the recipient;
- The invoice date;
- A unique and sequential invoice number;
- The quantity and nature (description customary in trade) of the supplied goods or the quantity and type of the supplied services;
- The date of supply of goods or services; in the case where an invoice is issued before the respective supply is carried out, the date when the payment is fully or partially received, provided that this payment date is known and is not identical to the invoice date;
- The consideration (net amount), split up according to the applicable VAT rates resp. applicable VAT exemptions, as well as any discounts or rebates agreed beforehand unless they are not already accounted for in the consideration;
- The applicable VAT rate and the VAT amount, or where a VAT exemption applies, an indication that, for the supply of goods or services, a VAT exemption applies;
- Where the customer is liable for the payment of the VAT, the reference to "Steuerschuldnerschaft des Leistungsempfängers" (Reverse Charge);
- Where the margin scheme for travel agents is applied, the reference to "Sonderregelung für Reisebüros" (Margin scheme - Travel agents);
- Where one of the special arrangements applicable to second-hand goods, works of art, collectors' items and antiques is applied, the reference to "Gebrauchtgegenstände/Sonderregelung" (Margin scheme - Second-hand goods), "Kunstgegenstände/Sonderregelung" (Margin scheme - Works of art) or "Sammlungsstücke und Antiquitäten/Sonderregelung" (Margin scheme - Collector's items and antiques) respectively;
- Where the customer receiving a supply issues the invoice instead of the supplier, the reference to "Gutschrift" (Self-billing).
11. What is reverse charge?
The reverse charge mechanism is the transfer of the VAT liability from the supplier to the recipient. Basically, the supplier owes the VAT to the tax office and has, therefore, to explicitly show the VAT on its invoices. However, in certain cases, the recipient is liable for the VAT. The requirements for this differ from country to country. E.g., for supplies subject to German VAT, the VAT liability is transferred to the recipient for the supplies of goods including installation (Werklieferungen) and the supply of services, provided that the recipient is an entrepreneur or juristic person and the supplier is established abroad. Furthermore, the VAT liability is transferred to the customer for supplies of gas and electricity, provided that the supplier is established abroad and that both, supplier and recipient, are resellers. If so, the supplier does not have to state VAT on its invoices. Rather, the recipient has to declare the VAT to his foreign tax office and has to pay the respective VAT in circumstances where he is not entitled to an input VAT deduction. Exemptions apply for specific passenger transportation, admission fees for trade fairs, exhibitions and congresses as well as for management companies organizing trade fairs and exhibitions. For some supplies the reverse charge mechanism even applies in cases where the recipient is not established abroad. These are:
- Supplies of goods transferred by way of security by a lessor to a lessee outside of insolvency proceedings;
- Supplies which are subject to real estate transfer tax (Grunderwerbsteuer);
- Supplies of goods including installation (Werklieferungen) and supplies of services, which consist of building, restoration, maintenance, alteration and removal of buildings with the exception of planning and supervision services if the recipient provides such services in a sustained manner and the competent tax office issues a corresponding certificate;
- Transfer of greenhouse gas emission certificates;
- Supplies of scrap and waste according to Schedule 3 of the German VAT Law;
- Supply of cleaning services in relation to immovable property if the recipient provides such services in a sustained manner and the competent tax office issues a corresponding certificate;
- Supplies of gold;
- Supplies of mobile phones, tablet computers, game consoles and integrated circuits in the case where the total amount invoiced during one unique economic process exceeds the threshold of EUR 5,000;
- Supplies of metals according to Schedule 4 of the German VAT Law in the case where the total amount invoiced during one unique economic process exceeds the threshold of EUR 5,000;
- Telecommunication services to resellers.
12. When does a foreign company need to VAT register in Germany?
Foreign entrepreneurs are required to VAT register in Germany when they carry out supplies for which the place of supply is Germany and the VAT liability is not transferred to the recipient. This basically also applies when the supplies are VAT exempt. Moreover, an obligation to VAT register applies in respect of recipients of supplies when they purchase goods or services and the VAT liability for this purchase is transferred to them.