COUNTRY GUIDES / Germany

Germany tax guide for businesses

VAT Rate
19%
E-Invoicing
B2G Mandatory
Real-Time Reporting
No
Digital Service Tax
No
Products supported
Lookup
Tax ID validation
Tax
Tax amount calculation
Invoicing
Compliant invoice generator
Reporting
Real-time transaction reporting

Compliance And Rates

VAT Number Format In Germany

All EU member states have a fixed format for their VAT numbers. In Germany, it includes 9 numbers and the prefix DE (e.g., DE123456789).

VAT Rates In Germany

The standard VAT rate in Germany is 19%, with a reduced rate of 7% on certain goods and services. Some 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 jewelry
  • 0% (Zero) – International deliveries, intra-community supplies, maritime and air transport

VAT Payments And Returns In Germany

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


VAT Returns Frequency In Germany

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

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


Penalties in case of late filings or misdeclarations

In the case of the late filing of VAT returns and payments, the German government prescribed the penalties as follows:

  • 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 the previous warning.
  • Late or non-filing penalties are maximum of 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 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 obliged to submit their invoices electronically.


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

E-Billanz

Companies in Germany must 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).

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