All You Need to Know About VAT in Germany

In short: The standard VAT rate in Germany is 19%, and a reduced 7% rate applies to items such as most food, books and newspapers. German VAT returns are filed electronically through ElsterOnline. EU sellers whose cross-border B2C sales exceed €10,000 a year must charge German VAT, either by registering in Germany or using the One Stop Shop (OSS).

Update (October 2026): This guide now reflects the rules in force in 2026. Since 1 January 2026, food served in restaurants and by caterers is taxed at 7%, while drinks stay at 19%. Since 2025, the small business limits are €25,000 (previous year) and €100,000 (current year), but they only help businesses established in Germany. Foreign businesses have no threshold. All German businesses must be able to receive e-invoices, and issuing them becomes mandatory in 2027 and 2028. We have also corrected our earlier statement on fiscal representatives: Germany does not require one.

If you do business in Europe’s economic powerhouse, you need to keep up with the latest value added tax (VAT) rules. German VAT rates and VAT registration in Germany can both be hard to get your head around. This post looks closely at the German VAT system, including its rates, registration process, compliance, ecommerce rules and more. For a closer look, see VAT Rates Ireland - What You Need to Know.

What are the VAT rates in Germany?

Germany has a standard VAT rate of 19% and a reduced VAT rate of 7%. A zero rate also applies to a few specific items. If you do business in Germany, you need to know how the German VAT system and its rates work. Read more in our guide: Navigating the Czech VAT System.

The standard rate of 19% applies to most goods and services. The reduced rate of 7% and the zero rate apply to specific items.

Standard VAT rate: 19%

The standard German VAT rate of 19% applies to a wide range of taxable goods and services. It covers everything from clothing and petrol to pharmaceutical products and alcoholic drinks. The standard rate is the backbone of Germany’s VAT system.

In practice, if a product or service is not covered by the reduced rate or an exemption, the standard rate of 19% applies. If your business operates in Germany, you must account for this rate in your sales and tax filings.

VAT becomes due at the tax point. You then pay it between the day after the end of the reporting period and the due date to submit and pay the VAT return.

Reduced VAT rate: 7%

The German reduced VAT rate of 7% applies to a specific set of goods and services. These include most food products, plants and animals, books and newspapers, works of art, and entry fees to cultural sites. The reduced rate aims to make essential items and cultural experiences more affordable and accessible.

Since 1 January 2026, food served in restaurants and by caterers is also taxed at 7%. Drinks served with it remain at 19%. The German Federal Government confirmed the change after the Bundesrat approved it in December 2025.

Zero VAT rate: 0%

In Germany, a zero VAT rate of 0% applies to certain goods and services, for example the supply and installation of certain solar (photovoltaic) systems for homes. Zero-rated supplies carry no VAT, like supplies that are exempt from VAT. But with zero-rated supplies, the supplier can still recover the VAT it has paid on inputs.

If you deal in these goods and services, you need to know how the reduced and zero rates apply. They directly affect your pricing and your tax obligations.

How do you register for VAT in Germany?

To register for VAT in Germany, you apply to the tax authorities to get a German VAT number. Both local and foreign companies need to register to stay compliant. The process varies by type of company, but the end goal is the same: a German VAT number and compliance with German tax rules.

VAT registration in Germany is based on EU directives, as Germany follows the VAT laws set by the European Union. Let’s look at the registration process for local and foreign companies.

VAT registration for local companies

Local companies in Germany must charge VAT if their turnover was above €25,000 in the previous year or goes above €100,000 in the current year. Below both limits, they can use the small business scheme (Kleinunternehmerregelung) and invoice without VAT. If turnover passes €100,000 during the year, the scheme ends with the supply that crosses the limit. To complete German VAT registration, a business must submit an application and a registration certificate.

The business must also give details of its directors, its legal form, its activities and its expected turnover. All of this must comply with German VAT law.

Registration itself is with the local tax office (Finanzamt), which issues a German tax number (Steuernummer). Based on that data, the Federal Central Tax Office (BZSt) then issues the VAT identification number. It needs this number for tax filings and compliance.

VAT registration also lets the company deduct the VAT it pays on services it needs for production. This shows why following the VAT rules matters: it stops VAT from eating into your profit margin.

VAT registration for foreign companies

Foreign companies that make taxable sales in Germany must also register for VAT. The process and requirements are similar to those for local companies, but there are some key differences. For example, the small business exemption that applies to some local companies does not apply to non-resident taxpayers.

This means there is no registration threshold for foreign businesses. You must register from your first taxable supply in Germany. A typical trigger is selling goods stored in Germany, for example in a fulfilment centre.

For businesses distance selling into Germany, the VAT registration threshold is €10,000.

To register for VAT, foreign companies must send the required documents to the tax authority. These include the registration form and documents that support their activities and sales. If you fail to register for VAT in Germany, you can face fines and other penalties.

Germany does not require EU or non-EU companies to appoint a fiscal representative. Under section 22a of the German VAT Act (UStG), fiscal representation is an option only in narrow cases. The foreign business must make only VAT-exempt supplies in Germany and have no right to deduct input VAT. Where one is used, the fiscal representative acts on your behalf for your VAT obligations, dealings with the tax authorities and related matters.

How do foreign businesses register step by step?

Foreign businesses register with a central German tax office assigned to their home country, not with the BZSt. The usual steps are:

1. Find your tax office: German law assigns each country of residence to one specific Finanzamt.
2. Submit the registration questionnaire: send the Fragebogen zur steuerlichen Erfassung with documents that support your business activities.
3. Receive your tax number: the Finanzamt issues a Steuernummer, which you use on VAT returns.
4. Receive your VAT ID: the Finanzamt passes your data to the BZSt, which issues the USt-IdNr. The BZSt says this can take several weeks.
5. Set up ELSTER access: returns must be filed electronically, so register for an ELSTER certificate early.

The German VAT number

A German VAT number is often called the "Umsatzsteuer-Identifikationsnummer" or "USt-IdNr". It has the following parts:

• The country code: The two-letter country code for Germany is "DE" (for Deutschland).
• The nine-digit numeric identifier: This number is unique to each business or individual. The German tax authorities assign it.

Put together, a German VAT number looks like this: DE123456789.

What are the VAT filing deadlines in Germany?

In Germany, VAT returns are due by the 10th day of the month after the VAT return period, and you file them monthly, quarterly or annually. Once registered, you must follow the German VAT compliance rules. This means submitting VAT returns, paying VAT on time and meeting monthly or quarterly deadlines. Related reading: Poland VAT Rates, Compliance Requirements, and More.

Electronic filing of VAT returns

You must file German VAT returns electronically through ElsterOnline, the online filing system of the German tax authorities. The process is simple. This makes it easier for businesses to file their tax returns on time and stay compliant with the tax office.

Remember, filing VAT returns on time is key to avoiding penalties and keeping a good relationship with the tax authorities.

VAT return deadlines

How often you file VAT returns in Germany depends on your company’s net VAT due in the previous calendar year. Companies with net VAT due of €9,000 or less must file quarterly returns. Those with net VAT due of €2,000 or less only need to file an annual return. If your company’s VAT liability is over €9,000, you must file VAT returns monthly.

When you submit your VAT returns, consider the tax period the payment covers. The deadline is the 10th day of the month after the VAT return period. Meeting deadlines and filing returns on time is essential to stay compliant and avoid penalties.

The default filing period is the calendar quarter. New businesses estimate their VAT for the current year, and the tax office sets the frequency from that estimate.

Can you get more time to file German VAT returns?

Yes. The tax office can extend the deadline for monthly and quarterly returns by one month on application (Dauerfristverlängerung). Monthly filers must then pay a special advance payment (Sondervorauszahlung), which they deduct again in the December return.

Key German VAT deadlines

• Monthly and quarterly returns: filed and paid by the 10th day after the end of the period, or one month later with an extension. Source: Bavarian State Tax Office.
• Annual VAT return: generally due by 31 July of the following year, and later if a tax adviser prepares it. Source: Bavarian State Tax Office.
• EU VAT refund claims: by 30 September of the year after the refund period. Source: BZSt.
• Non-EU VAT refund claims: within six months after the end of the calendar year, so by 30 June. Source: BZSt.

Do you have to issue e-invoices in Germany?

Not yet for most businesses, but every German business must already be able to receive them. Germany is phasing in mandatory B2B e-invoicing between 2025 and 2028:

• 1 January 2025: all businesses established in Germany must be able to receive structured e-invoices.
• 2025 and 2026: issuing e-invoices is optional. Paper and PDF invoices are still allowed.
• 1 January 2027: businesses with previous-year turnover above €800,000 must issue e-invoices.
• 1 January 2028: all businesses must issue e-invoices for domestic B2B sales.

The mandate only covers sales where both supplier and customer are established in Germany. B2C sales and cross-border sales are outside it. Invoices up to €250, travel tickets and invoices from small businesses under the Kleinunternehmer scheme are exempt. Accepted formats include XRechnung and ZUGFeRD from version 2.0.1, according to the Bavarian State Tax Office. For more detail, read our guide to e-invoicing in Germany.

What are the VAT rules for ecommerce and marketplaces in Germany?

Ecommerce businesses and marketplaces in Germany follow special VAT rules. These cover where you store stock, distance selling thresholds and the One Stop Shop (OSS). The rules exist because of the unique nature of online sales and the fast-changing digital landscape. If you work in this sector, you need to understand and follow them.

The Import One Stop Shop (IOSS) is especially useful for ecommerce businesses. It makes it simpler to declare and pay import VAT on goods brought into the EU.

For example, the distance selling threshold for VAT registration in Germany is €10,000. This means you must register for VAT if your annual cross-border sales exceed this amount. You also need to register your business for VAT if you store products in Germany.

The €10,000 threshold only applies to sellers established in the EU. It counts total cross-border B2C sales to all other EU countries, in the previous and current calendar year. Above it, you can declare German VAT through the OSS instead of registering in Germany. Sellers based outside the EU get no threshold.

How does intra-Community VAT work in Germany?

For B2B sales between Germany and other EU countries, intra-Community VAT usually works through the reverse charge mechanism. Intra-Community VAT transactions play a big part in EU trade, so German businesses need to understand them.

The reverse charge mechanism moves the duty to pay VAT from the supplier to the buyer. This makes transactions smoother and reduces the risk of tax evasion. It helps both buyers and suppliers, as it simplifies VAT between the EU's 27 Member States.

How can you recover VAT in Germany?

To recover VAT in Germany, companies must send an application form and a list of invoices to the local tax authorities. For businesses based outside Germany, this can be a complex and slow process. To recover VAT efficiently, you need to understand the procedure and submit the right documents.

Which route you use depends on where you are based:

• VAT-registered in Germany: deduct input VAT in your German VAT returns.
• EU businesses not registered in Germany: claim through the refund portal in your home country by 30 September of the following year.
• Non-EU businesses not registered in Germany: apply online through the BZSt portal within six months after the year ends. Your home country must refund VAT to German businesses too. Each claim must be at least €1,000, or €500 for a full year or the last period of a year.

Staying proactive and on top of the recovery process can help you get the most back and limit financial losses.

Why is EORI registration important in Germany?

An EORI number lets customs authorities in every EU country identify your business, so you need one to trade outside Germany. The Economic Operators Registration Identification (EORI) system is a key part of doing business in the European Union. This shared system lets customs authorities in all EU countries identify and track businesses moving goods through their territories.

Companies and sole traders in Germany that do business abroad must apply for an EORI number. Any company trading outside the country needs this number. You can apply for an EORI number in Germany. If your business is not based in Germany, you apply in the EU Member State where your business is registered.

How can you stay compliant with German VAT?

To stay compliant with German VAT, keep up to date and act early on everything from registration and filing to ecommerce and intra-Community rules. Business rules keep changing worldwide. Adapting to new rules and requirements will help your company stay competitive and compliant.

For current rates, filing frequencies and penalties at a glance, see our Germany VAT manual.

Do you need help with your VAT compliance? Book a free call with one of our VAT experts to find bespoke solutions for your business, optimize your VAT costs, and reach millions of new potential customers.

How Taxually handles this

Taxually’s CrossTax handles VAT registration, VAT, OSS and IOSS returns and fiscal representation in the countries you sell into, and checks your sales data against 250+ validation rules before each filing. OneTax then pays every tax authority with one bulk payment in your chosen currency.

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