VAT - value added tax in Germany

The value added tax is levied on sales made by a domestic entrepreneur within the framework of his company. Taxable revenues include deliveries of goods or other services.

The standard VAT tax rate is 19 percent. For certain sales a reduced rate of 7 percent is applicable. The reduced tax rate applies e.g. for books and newspapers, for many food products and also for certain transport services.

Certain sales are exempt from VAT. Particular reference should be made here to export deliveries and intra-EU community sales.

Every business is generally required to submit VAT tax returns no later than the 10th day after the end of a calender month. However, extensions of that period and also simlifications for small business are available.

A VAT return can be submitted electronically via the "ELSTER" webpage to the tax office.

For VAT purposes it is very important that an invoice includes:

• Full name and address of the performing entrepreneur
• Full name and address of the beneficiary
• VAT identification number or, in the absence of a financial reference tax number
• Date of issuance
• Progressive invoice number
• Quantity and customary name of the item or type and scope of other services
• Time of delivery or other service
• Breakdown of fees and deferrals
• Reduction of charges, such as discounts, bonuses, rebates
• The applicable tax rate and the tax- separately or a reference to the tax exemption

For invoices with amount below EUR 150 (including VAT) simplification rules exist. For the deduction of input VAT the following information should be included on such invoices:

• Full name and address of the performing entrepreneur
• Date of issue
• Quantity and usual description of the subject of the delivery or the nature and extent of the other service
• the fee and the tax amount due in a sum
• the applicable tax rate or in the case of a tax exemption
• Reference to the existence of a tax exemption.

Similar simplifications also apply to tickets.

Our accountants and tax advisers are based in Munich/Germany. If you have any questions please feel free to send a message: