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Registering for VAT in Germany

Looking to obtain an EU VAT number for Germany? SimpleVAT offers German VAT registration for foreign companies doing e-commerce in the EU.

VAT Guide

Germany

VAT in Germany is called "Umsatzsteuer" (USt) and the local tax authority is the Bundeszentralamt für Steuern (BZSt). The standard VAT rate in Germany is 19%. As a foreign company conducting taxable activities in Germany, you have to register for a German VAT number. EU companies can register directly with BZSt, so long as they know how to fill out their application and can navigate doing so in the local language. Non-EU companies are required to have a VAT agent, but unlike other EU member states, the agent does not share liability. A fiscal representative for German VAT therefore does not need to be jointly and severally liable for your VAT compliance. SimpleVAT helps both EU and non-EU companies register for a German VAT number and can also handle filing your monthly VAT returns in Germany.
Who is VAT liable in Germany

Who Needs to Register for VAT in Germany?

For e-commerce businesses operating in Europe, registering for VAT in Germany is necessary if you have stock stored there. Here are the primary situations that require VAT registration in Germany for non-German companies:
01

Amazon FBA Warehouse

Participating in Amazon's FBA programs and storing stock in Spanish warehouses

02

3PL Warehouse

Storing stock in a warehouse that you have rented to keep your products and fulfill orders.

fulfillment from French warehouse - register for VAT

Storing stock in a German warehouse rented from a 3PL fulfillment provider triggers the obligation to register for VAT in Germany. It's advisable to complete your registration before sending your stock to avoid customs clearance issues and import VAT reclaims.

For sellers utilizing Amazon FBA, it's important to understand the different FBA programmes and their VAT implications. Amazon's FBA programmes include:

EFN (European Fulfillment Network)

Choose one country for stock storage, requiring registration in that country (e.g., Spain).

MCI (Multi Country Inventory)

Choose multiple countries for stock storage, necessitating immediate VAT registration in the selected countries.

Pan European FBA

Distribute stock across up to 8 countries, including Spain. Register for VAT in all 8 Amazon FBA Pan European countries.

The process for obtaining a German VAT ID differs slightly for EU and non-EU companies: Requirements for becoming VAT registered

Do You Need to Register for VAT if You’re Selling to German Customers?

If you don't maintain stock in Germany, you don't need to register for a VAT number in Germany. However, you still have VAT obligations if you sell to German customers. Two main scenarios determine your VAT obligations for sales to German customers without stock in the country:
  • Distance selling into Germany from another EU country: register for OSS once your combined intra-community sales reach €10,000 (including sales in Germany and/or any other EU countries). Until you reach this threshold, you can continue paying VAT (including for your intra-community sales) in your home country.Registering for the OSS scheme entails filing OSS declarations on a monthly or quarterly basis. Learn more about the OSS scheme and how it can benefit you.
  • Cross-border transactions into Germany from a non-EU country: consider registration for IOSS if your sales include importing goods into Germany (or other EU countries) and the value of the goods does not exceed €150. The IOSS scheme enables non-EU companies (and EU companies engaging in dropshipping from outside the union) to streamline their VAT obligations for cross-border transactions into the EU, offering benefits such as avoiding delays at customs and providing a smoother experience for customers by including VAT in the purchase price. Non-EU companies interested in registering for IOSS must first obtain a VAT registration in an EU member state. Learn more about the IOSS scheme and how it can benefit you.

Common questions answered

Frequently Asked Questions

The standard VAT rate in Germany is 19%. However, there are reduced VAT rates applicable to certain goods and services. The reduced VAT rates in Germany are:

  • Reduced rate: 7%

These reduced rates are applied to specific categories of goods and services, such as certain food items, certain feminine pharmaceuticals, medical equipment for disabled persons, books, newspapers, periodicals.

For a more detailed breakdown of all VAT rates and categories of goods, please visit our EU VAT rates page.

Before 2021, a distance selling threshold determined VAT registration obligations in Germany. For foreign businesses, this threshold was €100,000 in annual turnover. However, in 2021, this system was replaced by an EU-wide threshold of €10,000 for combined EU sales, irrespective of the country. If your intra-community sales exceed €10,000, you must pay VAT in each relevant country. Until this threshold is reached, you pay VAT for all sales, including intra-community ones, in your home country.

To streamline VAT collection for intra-community sales, the European Union introduced the One Stop Shop (OSS) scheme. Under OSS, you can report your intra-community sales in your home country and pay VAT in one consolidated submission. Your home country then distributes the appropriate VAT amounts to other EU countries based on your sales report.

Any business with a VAT number in an EU country can register for the OSS scheme and settle their intra-community VAT by submitting monthly or quarterly OSS declarations.

In international e-commerce and cross-border transactions involving the EU, sellers must inform clients about additional costs associated with imports unless they register for the IOSS scheme.

When selling to customers in Germany from a non-EU country, customers are responsible for paying import VAT and applicable duties. Typically, these fees are settled with the carrier (e.g., La Poste or DHL), which handles customs declarations and charges an additional fee for the service.

Sellers with significant sales volumes to Germany or other EU countries can benefit from registering for the IOSS. This allows them to streamline the purchasing experience for customers, avoiding additional fees for customs services and offering prices inclusive of VAT.

It's worth noting that the IOSS scheme is not limited to non-EU companies; it is open to all businesses selling goods imported into the EU with a value not exceeding €150.

If your business is based outside the EU or EEA and you do not have an established presence in Austria for VAT purposes, you will need to appoint a tax representative in Germany. The tax representative will take on the responsibilities of ensuring VAT compliance on your behalf.

The time it takes to register and receive a German VAT number as a foreign company can vary based on several factors, including the complexity of the application and the efficiency of local tax authorities. Generally, the process takes between 6 to 8 weeks from the submission date. However, this period can be extended if there are issues with the application or if additional documentation is required. Working with experienced professionals or service providers like SimpleVAT can help streamline the process and ensure timely registration.

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