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Germany has a value-added tax (VAT) system known as ''Umsatzsteuer'' with a standard rate of 19% and reduced rates of 7% and 5% for certain goods and services.

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VAT scope in Germany

In Germany, the Value Added Tax (VAT) applies to a wide range of goods and services. Here is an overview of the VAT scope in Germany:

1. Taxable Transactions: VAT is levied on the supply of goods and services carried out within the territory of Germany. This includes the sale or transfer of ownership of goods, provision of services, imports, and intra-Community acquisitions.

2. Goods and Services: VAT is generally applicable to most goods and services, including but not limited to:
- Goods: This includes tangible items such as consumer goods, vehicles, machinery, and electronic devices.
- Services: This includes various services such as professional services, consulting, transportation, accommodation, restaurant services, telecommunications, and broadcasting services.

3. Exemptions and Reduced Rates: While most goods and services are subject to the standard VAT rate, Germany also has exemptions and reduced rates for specific categories. Some examples include:
- Exemptions: Certain goods and services may be exempt from VAT, such as healthcare services, education, financial services, and certain cultural activities.
- Reduced Rates: Some goods and services are subject to reduced VAT rates, which are lower than the standard rate. For example, essential goods like food, water, and medicines may be eligible for reduced rates.

4. Intra-Community Transactions: VAT also applies to transactions between Germany and other EU member states. This includes intra-Community acquisitions (purchases from other EU countries) and intra-Community supplies (sales to other EU countries). Special rules and reporting requirements apply to these transactions.

5. Registration and Compliance: Businesses involved in taxable transactions in Germany are generally required to register for VAT purposes. They must obtain a VAT identification number and comply with VAT reporting obligations, including filing periodic VAT returns and keeping proper records of their transactions.

6. Reverse Charge Mechanism: In certain cases, the responsibility for VAT payment may shift from the supplier to the recipient under the reverse charge mechanism. This applies, for example, to certain cross-border services or transactions involving specific goods.

Quick navigation

VAT scope in Germany

VAT registration in Germany

VAT returns and refund in France

German reverse charge

German consignment and call-off stock

German intrastat/ EC sales list

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German VAT compliance
- What Global Trade can help you with ?

    - VAT Registration: Businesses engaged in taxable transactions in Germany are generally required to register for VAT. This involves obtaining a VAT identification number from the German tax authorities. Registration can be done online or through a physical application.

    - VAT Rates and Invoicing: Familiarize yourself with the different VAT rates applicable to goods and services in Germany. Ensure that you charge the correct VAT rate on your sales and issue proper VAT invoices to your customers. The invoices must contain specific information required by the German tax authorities, including your VAT identification number.

    - VAT Returns and Payments: Registered businesses must file periodic VAT returns, usually on a monthly or quarterly basis, reporting their VAT transactions. The VAT return should include both output VAT (VAT charged on sales) and input VAT (VAT paid on purchases). The difference between output VAT and input VAT determines the VAT liability or refund. VAT payments are typically due with the VAT return.

    - Intrastat Declarations: If your business is involved in intra-Community acquisitions or supplies with other EU member states, you may have to submit Intrastat declarations. These declarations provide statistical information on the movement of goods between EU countries and help monitor trade within the EU.

    - Recordkeeping: Maintain proper records of your VAT transactions, including invoices, receipts, import/export documentation, and any other relevant documents. These records should be kept for at least ten years.

    - VAT Compliance Checks: Be prepared for VAT compliance checks by the German tax authorities. They may conduct periodic audits or inspections to verify the accuracy and completeness of your VAT reporting and transactions. Ensure that your records are organized and easily accessible for such checks.

    - VAT Refunds: If you are entitled to a VAT refund, follow the procedures outlined by the German tax authorities to claim the refund. This typically involves submitting a VAT refund application with supporting documentation.

    - Electronic Reporting: Germany has implemented electronic reporting requirements for VAT, such as the mandatory use of the "ELSTER" system for VAT filings. Ensure that you comply with the electronic reporting obligations and use the designated platforms for VAT submissions.

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