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If you are a foreign/cross-border business selling or planning to sell goods or services in the Germany, you may be required to register for VAT with the Bundeszentralamt für Steuern (German tax office).
You can always review the latest German VAT regulations on the German Tax Office website.
German VAT Information
Germany introduced VAT in 1968. As a member of the European Union (EU), Germany has fully incorporated all EU VAT Directives into the German VAT act. The German VAT act covers all details of VAT registrations, compliance, returns, Intrastat and other related requirements. The German Ministry of Finance is responsible for regulating the VAT regime.
The standard VAT rate in Germany is 19%, however, some specific goods and services are charged at a reduced rate of 7%. These are as follows:
When Should You Register?
If you are a foreign/cross-border company providing taxable supplies in Germany, you may be required to register for VAT and comply with all associated accounting and payment requirements.
German VAT returns are normally submitted monthly, however, small businesses with annual turnover under 7,000 EURO can chose to file VAT on quarterly basis. Newly registered companies must still submit on monthly basis for the first 2 years before they can apply to file quarterly. In addition, an annual VAT return is required.
You must submit a declaration and pay the tax resulting therefrom:
for Monthly / Quarterly Filing - by the 10th of the following month
for Yearly Filing - by the 31st of July of the month following Year.
Movement of goods between Germany and other EU States must be reported through intrastat.
The threshold for German Intrastat arrivals is €800,000 and dispatches is €500,000.
Intrastat should be filed on the 10th of the month following the movements.
This can typically be done with the VAT return. There may be minor infringement penalties for late filings.
Some foods, water supplies, some medical equipment, some transportation, some books, e-books, audiobooks, newspapers, some hotel accommodation, certain admission to sports events, social services, medical and dental care, firewood, takeaway food, taxation of some gold coins and jewellery.
Frequently Asked Questions | FAQ
Question: I'm planning to sell through an online platform such as Amazon or eBay, but i have not opened a seller account yet. Do I need to register for VAT first?
Answer: No, if you have not opened a seller account yet, (assuming you are not trading in Germany using other methods) there is no need to register for VAT. Once you open a seller account on a platform, such as amazon.de, you will then need to register for a German VAT number. This is necessary as you will have to indicate you reason for registration when applying for a German VAT number.
Question: I have registered for VAT in Germany, but i have not started trading yet, and i do not have a clear date of when i will start trading. Do i still need to file VAT returns?
Answer: Yes, you will need to file a zero VAT return until you start making taxable sales.
Question: I have received my German VAT number, but it is still not showing up as bound to my amazon seller account. do i still need to file VAT return?
Answer: Yes, you will still need to file VAT return and VAT return is based on your sales in Germany and not your amazon seller account status. Furthermore, your VAT certificate has a registration date on it, and you are required to file VAT from the registration date shown on your VAT certificate.