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%.
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.
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.
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.
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.
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.
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.
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.
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:
For all other countries not mentioned above, the tax office Berlin Neukölln is in charge.
According to German VAT law, an invoice has to contain the following data:
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:
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.