Germany Germany

Goods

This guide is for e-commerce companies that sell online via web stores or at marketplaces.

 

VAT Standard rate

The standard VAT rate in Germany in 2024 is 19%.

 

The Lovat VAT compliance platform

 

VAT Reduced rate

7%

See the summary of the EU VAT rates.

To learn more about German VAT rates, you can refer to the page “German VAT rates“.

 

Thresholds

From the 1st of July 2021, the distance selling thresholds were withdrawn and replaced by a unified threshold of EUR 10,000 for all EU members.

In other words, VAT should be charged at the VAT rate of the customer’s country of residence by companies whose annual taxable cross-border turnover is over EUR 10,000.

 

Deductible VAT

If goods or services were used to make taxable supplies in Germany, VAT in input invoices might be credited. Examples include:

  • VAT paid at custom clearance with your EORI number;
  • VAT paid to German suppliers.

If the company paid invoices before VAT registration it may deduct them after registration.

 

Registration procedure

The first step in registration involves getting a “Steurnummer,” or German tax identification number.

Those who sell in a German marketplace will also need an F22 Certificate.

When a company has the obligation to register, the owners will be required to complete and submit a VAT registration form, along with supporting documentation:

  • Certificate of incorporation;
  • Trade register extract;
  • VAT certificate;
  • Articles of Associations.

If the company is appointing a local tax agent or Fiscal Representative, then a Letter of Authority or Power of Attorney is.

 

Tax representative

There is no requirement to appoint a tax representative in Germany.

 

Liability for Marketplace Operators

Rules have been implemented for electronic Marketplace operators in Germany as of April 2019.

This means that global, as well as German, marketplace operators, have to keep specific information and documents about traders who conduct business in Germany via their marketplace. Moreover, marketplace operators are required to record data about the deliveries carried out.

If the trader fails to fulfill their German VAT obligations and if the marketplace operator does not meet the aforementioned archiving obligations, the marketplace operator will be liable for the outstanding VAT payments of the trader.

Therefore, marketplace operators need to take action to avoid exposure to any risks. Among other things the following actions urgently need to be considered:

  • Recording specific data from traders even if they are not professional dealers;
  • Collecting and archiving a German VAT registration certificate from the trader;
  • Documenting a date of supply/remuneration/location of departure and destination of sold goods.

 

Keeping records

Records about performed transactions must be kept in order to check the correctness of tax returns and payments. These records must be made available to the Federal Central Tax Office by electronic means on request. The retention period for the records is ten years.

 

VAT payment date

The VAT payment must be submitted by the 10th of the following month. For example, January’s payment must be submitted by 10th February, and so on.

 

Filing VAT returns

A taxpayer must transmit tax returns to the Federal Central Tax Office (BZSt) by electronic means. The LOVAT platform supports digital submission.

For the first year, the period for submitting preliminary VAT returns is the calendar month.

If the amount of VAT for the previous calendar year exceeds €7,500, the business owner must submit monthly preliminary returns.

A tax return must be filed even if no transactions have been performed during the relevant calendar month.

The dates for filing tax returns are as follows:

  • January – by 10 February;
  • February – by 10 March;
  • Yearly VAT return – 31 May.

Companies can also keep track of deadlines via the Lovat portal.

 

E-invoicing in Germany

Mandatory e-invoicing in Germany will be implemented in multiple phases, commencing with a mandate to receive structured e-invoices starting January 2025, followed by a broader requirement to issue structured e-invoices from January 2028.

Germany’s timeline for mandatory e-invoicing in business-to-business (B2B) transactions is as follows:

  • January 1, 2025

All German businesses with a registered office, management, domicile, or habitual residence in Germany must be able to receive and process electronic invoices that are compliant with or interoperable with the European electronic invoice standard EN 16931.

  • January 1, 2027

German businesses with an annual turnover of more than €800,000 must issue electronic invoices for domestic B2B transactions.

  • January 1, 2028

All German businesses must issue electronic invoices for domestic B2B transactions.

 

Non-resident businesses with VAT registrations in Germany will not be affected by the new rules. The obligation to issue electronic invoices generally will not apply to intra-EU supplies, as these will be covered by the digital reporting and invoicing obligations outlined in the ViDA project.

 

Need help with VAT compliance?

Digital services

Effective since 1st of January 2015. According to the German VAT Act («VATA»), digital services provided B2C by foreign companies are subject to German VAT if the location of the customer is in Germany. 

 

VAT Standard rate 

The standard VAT rate in Germany in 2024 is 19%.

 

The Lovat VAT compliance platform

 

VAT Reduced rate

There is no reduced rate established for digital e-commerce. 

 

VAT calculation peculiarity

VAT= Total revenue * 19/119.

 

Threshold

The revenue threshold is €0 for digital services. 

 

Pieces of evidence

To identify a customer’s location, merchants have to collect at least two items on non-contradictory evidence. And if two of them are in Germany, the customer may be determined as German:

  • Customer’s permanent address;
  • Billing address (bank or electronic payment operator);
  • IP address;
  • Telephone number;
  • The location of the customer’s fixed landline through which the service is supplied to him;
  • Other commercially relevant information.

 

E-services list

A digital product is any product that’s stored, delivered, and used in an electronic format. These are goods or services that the customer receives via email, by downloading them from the Internet, or through logging into a website, in particular:

  • E-books, images, movies, and videos, whether buying a copy from Shopify or using a service like Netflix. In tax language, these products are in a category usually called, «Audio, visual, or audio-visual products»;
  • Downloadable and streaming music, whether buying an MP3 or using a service like SoundCloud or Spotify. Of course, these products also fall into the audio category;
  • Cloud-based software and as-a-Service products, such as Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), and Infrastructure-as-a-Service (IaaS);
  • Websites, site hosting services, and internet service providers;
  • The provision of a database;
  • Online ads and affiliate marketing;
  • Dating;
  • Other services which are delivered over the internet or an electronic network due to their nature – are essentially automated and involve only minimal human participation.

 

Registration procedure

Pursuant to Section 18 (4c) German VAT Act (UStG), entrepreneurs must register before performing transactions covered by the special arrangement in the EU. Firstly, an e-merchant needs to apply for a BZSt number in order to use the BZStOnline Portal for the VAT on the e-services scheme. For VAT registration the company will be required to complete and submit a VAT registration form, along with supporting documentation:

  • Proof of VAT or tax registration in its country of domiciliation;
  • A copy of the certificate of incorporation of the company;
  • A copy of the company’s Articles of Association;
  • If the company is appointing a local tax agent or Fiscal Representative, then a Letter of Authority or power of Attorney is.

 

Keeping records

Records about performed transactions must be kept in order to check the correctness of tax returns and payments. These records must be made available to the Federal Central Tax Office or the responsible central authority of the other EU Member States by electronic means on request. The retention period for the records is ten years.

 

VAT payment date

The dates for VAT payment are as follows: 

  • Calendar quarter I by 20 April;
  • Calendar quarter II by 20 July;
  • Calendar quarter III by 20 October;
  • Calendar quarter IV by 20 January.

 

Filling VAT returns

E-service suppliers must submit this tax return to the Federal Central Tax Office (BZSt) by electronic means.  The tax period is the calendar quarter. A tax return must be filed even if no transactions have been performed during the relevant calendar quarter.

The dates for filing the tax return are as follows: 

  • Calendar quarter I by 20 April;
  • Calendar quarter II by 20 July;
  • Calendar quarter III by 20 October;
  • Calendar quarter IV by 20 January.

 

E-invoicing in Germany

Mandatory e-invoicing in Germany will be implemented in multiple phases, commencing with a mandate to receive structured e-invoices starting January 2025, followed by a broader requirement to issue structured e-invoices from January 2028.

Germany’s timeline for mandatory e-invoicing in business-to-business (B2B) transactions is as follows:

  • January 1, 2025

All German businesses with a registered office, management, domicile, or habitual residence in Germany must be able to receive and process electronic invoices that are compliant with or interoperable with the European electronic invoice standard EN 16931.

  • January 1, 2027

German businesses with an annual turnover of more than €800,000 must issue electronic invoices for domestic B2B transactions.

  • January 1, 2028

All German businesses must issue electronic invoices for domestic B2B transactions.

 

Non-resident businesses with VAT registrations in Germany will not be affected by the new rules. The obligation to issue electronic invoices generally will not apply to intra-EU supplies, as these will be covered by the digital reporting and invoicing obligations outlined in the ViDA project.

 

Need help with VAT compliance?