German VAT rates

German VAT rates

VAT in Germany (MwSt/USt). What is the VAT rate in Germany? How high are the sales tax rates in Germany? How many reduced VAT rates does Germany have? Where can I find the distance selling threshold value for German sales?

VAT news for Germany

All digital marketplaces are now (2019) responsible for making sure VAT is collected.

Germany changes the interpretation of the rule for supplying products from a German warehouse. The shift in legal definition implies it will now be possible to account and declare a sale of goods from a German warehouse to a German company as a “VAT-free sale within the EU”; if you sell from a company based outside Germany but have a warehouse inside Germany. Consequently, some none-German companies don’t have to be VAT registered in Germany anymore. Before 2017, older rules and their interpretations stated that stock deliveries from German warehouses always required a German VAT registration. This is no longer the case.

VAT rates in Germany

The German market is the world’s fourth-largest economy. Therefore it’s natural that many European small business owners are interested in the German market. Because of this, there is also a need for information about the German VAT rates in English. Which are the VAT tax rates in Germany? What is the standard VAT rate in Germany? What is the VAT on electronic services in Germany?

German VAT rates. Germany has two VAT rates. The standard level being 19% and the reduced sales tax rate on 7%.

Vat rates in Germany

German VAT number format

Format for EU-VAT number in Germany: DE000000000

What is the standard VAT rate in Germany?

Standard VAT rate in Germany: 19%

What is the reduced VAT rate in Germany?

Reduced VAT rate in Germany: 7%

Included items in the reduced rate are: Food, Plants, Animals, Books, Entrance fees, Artwork sold by the artist himself, Passenger transport up to 50 kilometres and hotels (but services related to the hotel operations are not covered by the lower VAT rate, this implies breakfast, parking, mini bar, spa, etc. have 19% VAT). You will often see an extra “Kurtaxe” (local tourist tax) of between €3-5 for hotel stays.

VAT rates for all EU member countries

German VAT rate for electronic services

If you have you sold apps, games, pictures, music (e-services), then you should use the German VAT rate of 19% when calculating the VAT for the customer. As you may know, companies must now calculate and collect VAT for the customer when selling digital services to private individuals – based on the VAT rate in the customers country (MOSS VAT system).

Threshold for distance sales to Germany

What is the value limit for distance sales to Germany? If you have traded with Germany with sales exceeding €100000, then you must register for VAT in Germany and pay and report VAT in Germany to the German Tax Authorities.

Threshold limit for registration of distance sales: €100000

How do you register for VAT in Germany?

One peculiar thing with VAT registration for foreign companies in Germany is that you are allocated to a particular local Tax Office depending on the country of origin of your business. No central office manages VAT registrations for foreign corporations. As an example, UK companies are handled by the tax office in Hanover. American (USA) companies are allocated to Bonn.

See a complete list of contact details for German Tax Authorities and individual offices for foreign companies based on country of origin

Exceptions for VAT in Germany

There are two exceptions for VAT in Germany that few people are aware of. If you sell to the German region of Heligoland, an island southwest of Denmark who switched nationality many times, you need to stop and think about how you manage VAT and invoicing. It is now formally part of Schleswig-Holstein and Germany but not included in the EU VAT area. The other exception is the area Büsingen am Hochrhein, which is located in Switzerland just south of the German border. Formally, the area is part of Germany, but economically a part of Switzerland, which means it is treated as if it were outside the EU VAT area concerning taxes.

If you sell to one of these two German areas it counts as an export outside the European Union (comparable with the Finnish Åland Island). If you buy from a company situated inside these areas, it becomes import to EU from a country outside EU, from a VAT perspective.

Where do I check German VAT numbers?

Check German VAT numbers here

European Union customs territory and VAT area

See an explanation of the included regions of the EU VAT area

Keywords: German VAT rates, VAT rate Germany, German VAT, VAT in Germany and Deutschland VAT rate on electronic services.

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  1. Pingback: EU VAT AREA - Accounting & Finance blog

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