A VAT Refund Guide to 

Germany

How to get VAT Refunds from Germany for your business

If your business is registered outside of Germany, you may be able to claim VAT refunds on costs incurred within Germany.
The below information details the requirements needed to be eligible for a VAT refund. This includes claimable expense types, Germany VAT rates, deadlines and claiming periods.
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Where is your company based?

EU

based businesses

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VAT-registered businesses in an EU member state are eligible to recover VAT on business costs from Germany under the EU VAT Refund Directive.

NON-EU

based businesses

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VAT-registered businesses outside of the European Union are eligible to recover VAT on business costs from Germany under the 13th Directive.

VAT in Germany: Everything You Need to Know 

In 1968, Germany became one of the first countries to adopt a value-added tax (VAT), with a standard rate of 11%. Since then, Germany has adjusted its VAT rates to reflect economic trends. For example, at the onset of the COVID-19 pandemic, the German government lowered the standard and reduced VAT rates to stimulate the economy; as of December 31st, 2020, the rates have returned to 19%—their pre-pandemic normal.

This figure places Germany’s VAT rate a few points below the EU VAT average but within the acceptable range. As a member of the European Union, Germany is required to maintain a standard VAT rate above 15% and a reduced rate above 5%.

Current VAT Rates in Germany

While VAT in Germany may differ from other European Union member state rates, it’s still similar in how it’s applied. When it comes to today’s VAT, Germany separates its rates into three categories:

  • Standard (19%) – Most products and services fall under the standard VAT rate.
  • Reduced (7%) – Goods and services in the reduced VAT rate category include certain foods, books, medical supplies, and forms of transportation.
  • Zero (0%) – Some forms of domestic and international transport are VAT-free. Additionally, some goods and services are exempt from the VAT program, such as cultural services, loans, and inter-community deliveries.

If you pay for VAT eligible goods or services from Germany and do not operate in the EU, you may be able to claim a VAT refund; Germany has a minimum VAT refund amount of €1,000.

How to Pay Your VAT Bill in Germany

Depending on your VAT amount from the previous calendar year, you are expected to pay your VAT bills either monthly, quarterly, or yearly.

  • Monthly – Monthly returns are required if last year’s VAT amount was more than €7,500. Newly registered businesses must also submit monthly for the first two years. The payment deadline for each month is the 10th day of the following month.
  • Quarterly – If last year’s VAT amount was between €1,000 and €7,500, you can pay quarterly. Your deadline is the 10th day of the month following each quarter.
  • Yearly – For VAT amounts under €1,000, you can submit them annually. The deadline is July 31 of the following year.

To make your VAT return, you must register with the German tax office using ElsterOnline. You’ll find the forms you need under Formulare & Leistungen.

 

Germany VAT Compliance

If you provide goods or services to consumers or businesses within Germany, you may need to register for German VAT at a jurisdictional tax office. If your business has completed its German VAT registration, you will need to comply with all of the following VAT rules and regulations:

  • Original invoices and receipts must be submitted in full and numbered consecutively
  • An official business registration document from your country must be provided
  • Accounts and records must be kept for at least 10 years
  • Approved foreign exchange rates must be used
  • Submissions must be made on time; late submissions will incur interest

The European Commission also ensures each EU member state is keeping up with VAT compliance and VAT directive.

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Sources:

Organisation for Economic Co-Operation and Development. Consumption Tax Trends – Germany. https://www.oecd.org/tax/consumption/consumption-tax-trends-germany.pdf

Office of the Federal Government. Drop in value added tax (VAT) – important questions and answers. https://www.bundesregierung.de/breg-en/search/faq-mehrwertsteuersenkung-1765150

European Commission. What is VAT? https://ec.europa.eu/taxation_customs/what-vat_en

Which countries have reciprocity with Germany?

All EU countries, Andorra, Antigua and Barbuda, Australia, Bahamas, Bahrain, Bermudas, British Virgin Islands, Brunei Darussalam, Bosnia and Herzegovina, Canada, Cayman Islands, China (Taiwan), Gibraltar, Greenland, Grenada, Guernsey, Hong Kong, Iceland, Iran, Iraq, Israel, Jamaica, Japan, Jersey, Korea (People‘s Rep.), Korea (R.O.K.), Kuwait, Lebanon, Liberia, Libya, Liechtenstein, Macao, Maldives, Marshal Islands, Macedonia, Norway, New Zealand (from 1 April 2014), Oman, Qatar, Pakistan, St. Vincent, San Marino, Saudi Arabia, Serbia, Solomon Islands, Swaziland, Switzerland, United Arab Emirates, U.S.A and Vatican City

For a more detailed explanation on what reciprocity means within the scope of VAT, click here:

What expenses are claimable in Germany?

ENTERTAINMENT & HOSPITALITY

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Entertainment

7% & 19%
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Hotels & Accommodation

7%
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Restaurants

19%

EVENTS

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Conferences, Trade Shows & Exhibitions

19%
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Training Courses & Seminars

19%

GENERAL EXPENSES

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Goods

19%
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Inter-company charges

19%
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Office Expenses

19%
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Marketing Costs

19%
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Professional Fees & AP invoices

19%

TRAVEL RELATED

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Car Rental

19%
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Fuel

0%
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Public Transport

7% & 19%
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Taxis

7% & 19%

Additional Information

How far back can your business claim VAT from Germany?
January to December of the previous year
What’s the foreign VAT deadline in Germany?
30 June of each year (Within 6 months of the end of the calendar year in which the tax was incurred)
How long does it take to receive a VAT refund from Germany?
Depending on the complexity of your application and the capacity at the VAT authority, it can take up to 6 months for an EU company and up to 10 months for non-EU companies to receive a VAT refund from Germany

Need help with your VAT refund from Germany?

You don’t have to do this alone. We’ve been helping companies reclaim foreign VAT refunds for over 20 years. We have the knowledge and technology to process your refunds quicker as well as attend to any unforeseen VAT authority queries that may arise.

Download a full international VAT guide and never miss a deadline

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