Germany

The basics

VAT in Germany is known as Mehrwertsteuer (MWSt). The standard rate is 19%, while the reduced rate of 7% applies to goods and services such as books, medical equipment, newspapers, periodicals, admission to cultural services, restaurants, and hotel accommodation. The standard 19% rate applies to pharmaceutical products, pay TV and cable television, clothing, hairdressing, and certain foodstuffs. Since 1 January 2026, food served by restaurants and catering services is taxed at the reduced 7% rate on a permanent basis, applied uniformly to dine-in, takeaway and delivery. Beverages are excluded and remain at 19%.

VAT registration

For resident businesses in Germany, the VAT registration threshold is €22,000: once turnover exceeds this amount, registration becomes mandatory. Following new EU-wide rules introduced on 1 July 2021, the distance selling threshold was unified at €10,000 across all EU countries. If annual cross-border sales exceed this amount, a VAT return must be submitted. The same obligation applies if products are stored in Germany or if a business is enrolled in an FBA programme (Fulfilled-by-Amazon) that includes Germany.

German VAT registration must be carried out at the office responsible for the country where the business is based. For example, companies headquartered in France must apply at the Offenburg office, while those based in the United Kingdom must submit their application in Hanover.

Fiscal representative

Neither EU nor non-EU companies operating in Germany are required to appoint a fiscal representative.

VAT returns and penalties

The frequency of VAT return submissions depends on the previous year’s turnover and is communicated by the relevant tax office. There are three options: monthly, if the previous year’s VAT liability exceeded €9,000; quarterly, if the liability was between €2,000 and €9,000; and annually, if the liability was below €2,000. Newly established businesses with no historical data will be asked to estimate their annual turnover, on the basis of which the tax office will determine the filing frequency.

Deadlines for submission are the 10th of the month following the relevant tax period for monthly and quarterly returns, and 31 May of the following year for annual returns. All returns must be filed electronically through the Elster portal. Late filings are subject to a penalty of 10% of the VAT due, up to a maximum of €25,000, while late payments incur a charge of 1% per month on the outstanding amount.

Intrastat declarations

Both resident and non-resident businesses in Germany that meet the relevant requirements must submit Intrastat returns by the 10th of each month. Failure to comply may result in fines. The annual thresholds for filing are €800,000 for arrivals and €500,000 for dispatches.

Reverse charge

The reverse charge mechanism shifts the responsibility for reporting and paying VAT from the supplier to the recipient of goods or services. In Germany, it applies to transactions involving cross-border supplies within the EU as well as to specific industries. Under this mechanism, the recipient accounts for both input and output VAT on their own return, while the supplier is not required to be VAT-registered in Germany.