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Summary

Standard VAT rate: 19%
E-Invoicing: mandatory in B2G
Real-time reporting: e-Bilanz system
Digital service tax: no

Compliance and rates

 

VAT number format

All EU member states have a fixed format for their VAT numbers. In Germany, it includes 9 numbers and the prefix DE (i.e. DE 012345678).

 

VAT rates

The standard VAT rate in Germany is 19%, with reduced rate of 7% on certain goods and services. A number of services are exempt from the German VAT, such as intra-community supplies, maritime and air transport.

19% (Standard) – Applies to all taxable supplies, with certain exceptions

7% (Reduced) – Water supplies, local public transport, books, newspapers, hotel accommodation, agricultural supplies, tickets for cultural and sports events, medical and dental care, taxation of gold and jewellery

0% (Zero) – International deliveries, intra-community supplies, maritime and air transport

 

VAT payments and returns

All businesses with German VAT number must submit periodic VAT reports and payments.

VAT Returns frequency

For all companies that operate in Germany, VAT returns must be submitted on a monthly basis or quarterly basis, depending on the annual revenue of the business entity.

Monthly – by 10th of the following month if the annual revenue is higher than EUR 7,500.

Quarterly – by 10th of the following month if the annual revenue is less than EUR 7,500.

Penalties in case of late filings or misdeclarations

Non-registration and/or late registration – there are no penalties or sanctions for not registering an entity or for a delayed registration as the MOSS is optional for entrepreneurs

Non-payment and late payment of VAT – late payment penalties are 1% per month of the outstanding amount.

In cases of non-submission of a VAT return a coercive fine which can amount up to EUR 25,000 can be charged after previous warning.

Late or non-filing penalties are maximum 10% of the assessed VAT amount or EUR 25,000.

Invoice requirements

The required information on an invoice is regulated in Section 14 Paragraph 2 No. 2 of the Sales Tax Act (UstG). Invoices must contain at least the following information:

  • supplier / issuer data (company name, address)
  • customer data (address and other data if available)
  • tax number of the supplier issued by the tax office
  • sales tax identification number issued by the Federal Central Tax Office
  • date of issuance
  • a unique number of the invoice
  • full description of goods and services provided (quantity)
  • information about the delivery of the goods and services
  • rate and amount of VAT applicable for the category of goods and services provided
  • the invoice total

 

E-Invoicing

From April 2020, all suppliers billing the Government will be obligated to submit their invoices electronically.

For B2B and B2C transactions, issuance of invoices electronically is permitted, but still not mandatory.

 

e-Bilanz

Companies in Germany are required to file an Electronic Tax Balance Sheet (eBilanz) as an appendix to their annual electronic company tax returns.

Bundesministerium der Finanzen (the German Ministry of Finance defined the eXtensible Business Reporting Language (XBRL) as the mandatory technical format for all data transmissions by companies to the tax authorities related to Electronic Tax Balance Sheet (eBilanz).

Turnkey invoice compliance.

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