All about VAT Compliance in Germany

Tax Rate: 19%

Any company registered with the German tax authorities as a non-resident VAT trader must report taxable transactions through periodic filings, known as returns.

How often are German VAT returns required?

Like all EU member states, the German VAT reporting calendar is on an annual basis. This requires an annual return. In addition, quarterly VAT returns are required if sales range between Euro 1,000 and Euro 7,500 per annum. If above this amount, then monthly filings are required. The exception is newly registered companies, which must submit each month for two years.

What German VAT can be deducted?

In addition to declaring sales or output VAT in the German return, companies can offset this with the corresponding input or purchase VAT. There are some exceptions, including:

  • Staff telephony in non-business related.
  • Gifts.

What are the deadlines for filing German VAT returns?

Any German monthly or quarterly VAT filing is due on the 10th of the month following the period’s end. It is possible to apply for a continuing month’s delay on this, but this will require a cash advance payment. The annual German VAT filing, summarising all transactions through the year, is due by 31st May of the following year.

Any German VAT due must be paid at the same time.

Where are German VAT returns filed?

When a company is first VAT registered, it is allocated to one of the many German tax offices around the country. The allocation is based on the country of residency of the trader. For example:

  • French companies – Offenburg
  • UK companies – Hanover
  • US companies – Bonn

German VAT returns are filed electronically since 2013, with electronic authentication, over the Internet.

German VAT penalties

If there are misdeclarations or late fillings of German VAT returns, foreign companies may be subject to penalties. Late filings are subject to a charge of 10% of the VAT due, with a limit of €25,000. If the payment is delayed, there is a further charge of 1% of the VAT due per month overdue. There is a four-year statute of limitations for German VAT, except for fraud, in which case it is extended to ten years.

How are German VAT credits recovered?

If there is a surplus of VAT inputs over outputs (more VAT incurred than charged), then a German VAT credit arises. In theory, this is due back to the VAT-registered business. In the German VAT return, there is a box to tick to apply for a refund which should be returned within three months. However, this may trigger a VAT audit by the tax authorities. Otherwise, the credit is rolled over to the next filing.

When do German EU Sales List reports have to be completed?

If a German VAT-registered business completes an intra-community supply, a sale to another EU VAT-registered business of goods or services across the German border, then this may have to be reported in the ESL. There is no reporting threshold.

When should German ESLs be filed?

ESLs are filed in Germany on a monthly basis for goods once sales go over €100,000 per annum. Otherwise, it is quarterly filings for goods. For services, the returns are filed quarterly. The filing date is the 25th of the month following the reporting period (monthly/quarterly) end.

German ESL filings are made online. There may be a fine of up to €5,000 for late or incorrect German ESL filings.

Any company registered with the German tax authorities as a non-resident VAT trader must report taxable transactions through periodic filings, known as returns.