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Who is required to register as a VAT payer?

VAT registration in Germany applies to businesses that:

  • import goods into the German market from outside the European Union or export goods outside the European Union
  • make sales of goods to other European Union member states
  • make purchases and sales of goods on the territory of Germany
  • conduct online sales directly to German consumers above the €10,000 annualized limit (this is a pan-European limit) and do not use OSS settlement
  • store goods in Germany for resale
  • organize live events, exhibitions, conferences, etc. in Germany.

Registration should take place before the commencement of activities subject to such taxation.

Two categories of VAT number are used in Germany for tax purposes:

  • Steuernummer (St. -Nr.) - a tax number for domestic transactions. It is assigned by the tax office where the company is registered. It is used in VAT returns and in all correspondence, audits and day-to-day matters with the tax office.
  • Umsatzsteuer-Identifikationsnummer (USt-IdNr.) – VAT-EU number for German taxpayers making intra-Community transactions within the European Union. This number is visible in the VIES system.

Entities registered in Germany are obliged to file an annual return by July 31.

The deadline for filing returns and paying any VAT payments is expires on the 10th of the month following the end of the accounting period.

Businesses with VAT payable in excess of the EUR 7,500 threshold and newly registered entities are required to submit VAT returns on a monthly basis. However, if the amount of VAT payable is between EUR 1,000 and EUR 7,500, declarations can be submitted to the US on a quarterly basis. In either case, an annual return is required. Failure to exceed the EUR 1,000 threshold (in the previous calendar year) cancels the obligation to file monthly or quarterly declarations from the new year. In this case, the company should file only 1 annual declaration. All settlements are done electronically.

Foreign entities may be subject to penalties of up to 10% of the VAT due if they file returns with errors or after the deadline. Germany is a country where liabilities to the tax authority are time-barred after 4 years. In the case of repeated tax offenses, this period can be extended to 10 years.

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