VAT registration in Germany: how to be VAT compliant?
VAT registration in Germany is a question to be examined very carefully before doing any kind of business in Germany. Most of the transactions done by a non German established company have to be declared to the German Tax Administration and require as a result a VAT registration in Germany.
The necessity of applying for a VAT registration number in Germany will depend on many factors such as the terms of delivery agreed with your clients and on the quality of your clients, if they are private consumers or companies. We therefore strongly recommend to start investigating your need of a possible VAT registration in Germany by RMB before you start selling.
Do you need a VAT number in Germany?
You need to apply for a VAT registration in Germany if you are involved in the following kind of business transactions:
- You sell goods to companies on the German territory
- You sell and ship goods from Germany to companies based within the EU (Intracommunity supplies)
- You ship goods from Germany outside the EU (exports from Germany)
- You sell goods to German private individuals (B to C domestic sales)
- You provide refurbishment or construction services on the German territory for private clients
If you have or plan to have one of these business transactions, applying for a VAT registration number in Germany is compulsory.
German VAT rates
1. Standard VAT rate
The standard VAT rate in Germany is 19%.
2. Reduced VAT rate
The reduced VAT rate in Germany is 7% and applies on (list is not exhaustive) :
- Food and non alcoholic beverages,
- Books, magazines and newspapers,
- Hotel accommodation,
- Games and entertainment.
Your company is allowed to charge your domestic VAT on your sales to German private individuals until you reach 100.000 Euros of turnover during the year. Once you exceed this threshold you need to register for VAT in Germany and charge German VAT to your clients.
VAT registration process
If your company needs to register for VAT in Germany, RMB’s experts will provide you with the documents needed to proceed with your VAT registration. We will prepare and file all the necessary information requested by the German Tax Administration.
The VAT registration process usually takes around 3 weeks in Germany before the VAT identification number is granted.