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Key takeaways
- Germany VAT rates: The standard VAT rate is 19%, with a 7% reduced rate for items such as books, newspapers, and hotel accommodation.
- Registration threshold: Resident businesses must register once turnover exceeds €22,000, while the EU-wide distance selling threshold is €10,000.
- Filing & penalties: VAT returns are filed monthly, quarterly, or annually, and late filings or payments can incur penalties up to 10% of VAT due (capped at €25,000).
Germany is Europe’s largest economy, and therefore a great place to expand your business. If you’re thinking about selling in Germany, there’s a very good chance that you’ll need to register for VAT. Read our VAT Germany guide to find out more.
What is the German VAT rate?
VAT (Value Added Tax) in Germany is known as Mehrwertsteuer (MWSt). The standard German VAT rate is 19% and the reduced rate is 7%. In response to the covid-19 pandemic, the German government temporarily reduced VAT from 19% to 7% on meals sold in restaurants and via other catering services. The change will remain in effect until at least December 31st, 2023.
Registering for VAT in Germany
For resident businesses in Germany, the VAT registration threshold is €22,000. So if your turnover exceeds these thresholds, you must register for VAT.
Following new EU-wide rules introduced on July 1, 2021, the distance selling threshold in Germany is now €10,000, the same as all other EU countries. If your annual cross-border sales exceed €10,000, you must submit a VAT return. This is also the case if you store products in Germany or are signed up to an FBA program (Fulfilled-by-Amazon) that includes Germany.
German VAT registration must be done at the office allocated to the country where your business resides. For example, if your company is based in France, the correct tax office to apply at would be Offenburg, whereas if it’s located in the UK, Hanover is where you would apply for your German VAT number.
Fiscal representative in Germany
Neither EU nor non-EU companies operating in Germany are required to appoint a fiscal representative.
German VAT return filing and penalties
When and how often you need to submit your German VAT returns will depend on the annual turnover for the previous year. The tax office responsible for your VAT returns will communicate this to you. There are three options:
- Monthly: You must submit your VAT returns each month for the next year if your VAT liability was greater than €9,000 the year prior.
- Quarterly: If your VAT liability from the previous year was between €2,000 and €9,000 you must file your VAT returns every three months.
- Annually: You must submit your VAT returns every year if your previous year's VAT liability was less than €2,000.
It may be the case that you don’t have figures from previous years because, for example, your company is new. In this scenario, you’ll be asked to estimate the annual turnover, from which the tax office will let you know when and how often to file your German VAT returns.
German VAT filings are due on the 10th of the month following the relevant tax period (monthly and quarterly) and on May 31st of the following year for annual returns. VAT returns must be filed electronically via Elster.
If a German VAT return is filed late, your company will be subject to a late filing penalty of 10% of the VAT due (up to a maximum of €25,000). Late payments will incur a charge of 1% of the VAT due for every month the VAT is not paid.
German Intrastat declarations
Both resident and non-resident businesses in Germany who are eligible should submit Intrastat returns. These returns need to be filed by the 10th of the month, and failure to do so could result in fines. The annual threshold for filing an Intrastat return is €800,000 for arrivals and €500,000 for dispatches.
Reverse charge in Germany
The reverse charge mechanism shifts the responsibility for reporting and paying VAT from the supplier to the recipient of goods or services. In Germany, it applies to transactions involving EU cross-border supplies as well as specific industries. Under the reverse charge, the recipient accounts for both input and output VAT on their VAT return. The supplier does not need to be VAT-registered in Germany.
Frequently asked questions
What is the VAT rate in Germany?
Germany’s standard VAT rate is 19%, with a reduced rate of 7% applying to items such as books, newspapers, medicines, hotel stays, and restaurant meals. Some temporary reductions may apply to specific sectors.
When do I need to register for VAT in Germany?
Resident businesses must register once annual turnover exceeds €22,000. For EU cross-border sales, the distance selling threshold is €10,000. You must also register if you store goods in Germany or use Amazon FBA.
How do I register for VAT in Germany?
VAT registration must be done through the local tax office responsible for your country. For example, UK businesses apply via Hanover, while French companies apply via Offenburg. Once approved, you’ll receive a German VAT number.
Do foreign businesses need a fiscal representative in Germany?
No. Neither EU nor non-EU businesses are required to appoint a fiscal representative to operate in Germany.
How often must VAT returns be filed in Germany?
- Monthly – if annual VAT liability exceeds €9,000
- Quarterly – if between €2,000–€9,000
- Annually – if below €2,000
Returns are due by the 10th of the following month (or May 31 for annual returns) and must be filed electronically via Elster.
Are Intrastat declarations required in Germany?
Yes. Intrastat returns are required for trade within the EU once annual thresholds reach €800,000 (arrivals) or €500,000 (dispatches). Submissions are due by the 10th of the following month.
