FAQ VAT

 

What is the VAT tax rate?

The VAT’s statutory tax rate is 19% since January 1st, 2007. The VAT’s reduced tax rate is 7%.

Legal basis to be found in § 12 UStG.

Which deadlines are to be considered when filing VAT tax declarations?

In general the legal year is the taxable period of VAT. Hence the yearly VAT declaration is to be filed latest on May 31 of the subsequent year. In case the yearly declaration is filed by a tax representative, the deadline is automatically extended to December 31 of the subsequent year.

Despite of the yearly VAT declaration, VAT interim reports are to be filed. These have to be submitted until 10 days after expiration of the reporting period. In case the tax load of the previous year exceeds EUR 7.500, the reporting period is equal to the calendar month. For the year of foundation and the subsequent year, the reporting period of new formations is the calendar month. In case a refund for the previous year exceeds EUR 7.500, the entrepreneur can choose the calendar months as reporting period. It is also possible to be exempted from interim reports and only submit yearly declarations, if the tax charge for the previous year was less than EUR 1.000.

To lengthen the submission deadline, an application of permanent extension can be filed. The submission deadline is then extended for the period of one month.

Legal basis to be found in § 16 and § 18 UStG.

How does the submission if VAT declarations take place?

Submitting yearly VAT declarations and VAT interim reports is done electronically, considering officially stipulated regulations. Payable taxes or profit in favor of the entrepreneur is to be calculated independently.

Legal basis to be found in §18 UStG.

When are taxes due?

In case taxes payable remains after the calculation of the yearly VAT declaration, it has to be paid within a month after submission of the declaration. However, if taxes payable remain after the calculation of the interim reports, it has to be paid as a so-called “VAT pre-payment” until 10 days after expiration of the reporting period. If permanent extension was granted, the VAT is due one month later.

Legal basis to be found in §18 UStG.

Proper invoices – Which information have to be provided?

A proper invoice always contains:

  • The full name and address of the affording entrepreneur and of the recipient (Exemption: invoices for small amounts not exceeding EUR 150);
  • The affording entrepreneur’s tax number issued by the financial authorities or the VAT identification number issued by the Federal Central Tax Office;
  • The date;
  • A continuous number with one or more rows, which is issued once for identification of the invoice by the issuer;
  • Amount and specifics (commercial term) of the delivered goods or the extent and specifics of the service;
  • Point of time of delivery or service execution;
  • At invoice set up before creation of revenue, the point in time of collection of full or partial payment, if the moment of collection is set and not identical to the invoice’s date;
  • The in terms of tax rates and particular tax exemptions broken down payment, as well as every pre-determined discount, in case it is not yet added to the payment;
  • The applicable tax rate as well as the tax due to the payment or in the case of tax exemption, a hint that the delivery or other service is subject to a tax exemption;

Depending on the circumstances moreover:

  • At intra community supply and other intra community services according to § 3a par. 2 UStG including tax liability transition, the VAT identification number of the recipient;
  • In case of transition of the tax liability the information “tax liability of the recipient”;
  • In case of accounting of travel services the information “special regulation for travel agencies”;
  • In case of margin scheme the information “used goods/special regulation” or “artworks/special regulation” or “collector’s items and antiques/special regulation”;
  • If the invoice is issued by the recipient and not by the supplier the information “credit”.
VAT identification number - What is it and where can I receive one?

The VAT identification number (abbreviated in German “USt-IDNr.”) is to mark an enterprise within the area of European Union. It is required, when the enterprise does participate at the intra community trade of goods and services – thus the trade between EU member nations.

Companies registered in Germany are assigned a identification number by the Federal Central Tax Office in Saarlouis (Bundeszentralamt für Steuern, BZSt) after filing an application. The number is added to the tax number assigned by the tax office; hence does not substitute it. In order to file summarized reports (declaration of intra community supply and services) the identification number is mandatory. It is suitable for claiming entrepreneurial status and can be used on invoices instead of the tax number of the supplying enterprise.

Legal basis to be found in § 27a UStG.

Legal basis to be found in § 14 and § 14a UStG as well as § 33 UStDV.

Summary report – what is it?

Intra community supply and intra community service with transition of the tax liability (reverse-charge) as well as intra community triangular trade are subject to a summary report by every participant. The summary report is to check, whether a tax-free intra community supply or such a service is subject to VAT taxation by the recipient in the destination country.

Legal basis to be found in § 18a UStG.

What deadlines are to consider when filing a summary report?

The summary report is due 25 days after the referring reporting period and is to be submitted electronically.

The reporting period for intra community supply and intra community triangular trade is always the calendar month. In case the amount of the assessment basis for intra community supply and intra community triangular trade does not exceed EUR 50.000 within the current year and the previous four quarters, the summary report is to be filed until 25 days after the quarter. However, the entrepreneur has the choice to keep filing summary reports on a monthly basis. Attention: Keeping the calendar month as reporting period has to be registered with the Federal Tax Office!

The reporting period for intra community services with transition of the tax liability (reverse-charge) is always the quarter of the year. However, the entrepreneur may - if already mandated to file monthly reports because of intra community supply and intra community triangular trade - also file the assessment basis of intra community services on a monthly basis as well. Attention: Deviation from quarters as reporting period has to be registered with the Federal Tax Office!

If the entrepreneur is exempted from filing the VAT pre-registrations, summary reports can be filed until 25 days after the end of the calendar year. However this requires, that (1) the entire revenues of the previous and current calendar year do not exceed EUR 200.000 in total, (2) the summary report’s declared revenues of the previous and current calendar year do not exceed EUR 15.000 and (3) delivered goods are not new vehicles to recipients with VAT identification number.

Legal basis to be found in § 18a UStG.

What is an Intrastat-report?

The Intrastat-report defines a mandatory reporting obligation used for conducting statistics about the intra community movement of “community products”. These statistics appear in the so called Intratradestatistic. With these reports the Federal Office of Statistics monitors the actual goods traffic of community goods (shipments and receipts) between member nations of the European Union. The Intrastat-report is not to be confused with the summary report, with which every entrepreneur has to report intra community supply and services to the Federal Tax Office. The reporting threshold for Intrastat-reports in Germany is set both for receipt and shipping of goods at EUR 500.000.

Reporting period for the Intrastat-report is the calendar month. The report has to be filed directly with the Federal Office of Statistics until 10 days after the reporting period ends. Extensions of this time limit are not possible.

The legal bases are to be found in the EU Act No. 638/2004 of the European Parliament and the Council of March 31st, 2004.

What is the Reverse-Charge-procedure?

Generally the supplier is liable to the VAT. The entrepreneur has to declare the VAT openly in the invoice and discharge the tax to the finance authorities. In order to conquer misuse the lawmakers however customized the procedure, especially in cases which are subject to frequent fraud, so the tax load is transferred to the recipient. This is the so called reverse-charge.

Prerequisites for the revere-charge procedure differ from nation to nation. For revenues in Germany the tax load for all supply and other services is transferred to the recipient (being an entrepreneur or a legal entity) for example when the supplier is based in another country.

Consequences of the transition of tax liability: The supplying entrepreneur does not charge VAT. Instead the recipient has to declare and discharge the VAT to the finance authority. If the recipient is entitled to input tax deduction, it may be claimed. Hence, economic burdens are not existent.

More cases in which the reverse-charge-procedure applies are:

  • Delivery of chattel mortgage goods by the protection seller to the protection recipient out of any insolvency proceedings;
  • Revenues coming under land transfer tax law;
  • Work and material supply and other services for production, restoration and maintenance;
  • Transition of greenhouse gas emission-certificates;
  • Supply of scrap and garbage in the sense of appendix 3 VAT law;
  • Cleaning of buildings or building sections;
  • Gold supply;
  • Supply of mobile phones, tablet computers, gaming consoles as well as integrated circuits, if the amount of the related invoice within an economic procedure is at least EUR 5.000;
  • Supply of metal in the sense of appendix 4 VAT law.

Legal basis to be found in §13b UStG.

Are foreign entrepreneurs mandated to register in Germany?

If foreign enterprises produce revenue in Germany and are not entitled to make use of reverse-charge, they have to register in Germany. This applies always, even when revenues are subject to tax exemption. A mandatory registration applies also for the recipients, if they receive services, for which the tax load was passed to them.

Where is the finance authority responsible being for me?

German entrepreneurs are assigned to the finance authority, in whose area the enterprise operates –import sales tax being an exemption. For foreign companies responsibility depends on the specific country of residence.

  • Austria: Finanzamt München II
  • Belarus: Finanzamt Magdeburg II
  • Belgium: Finanzamt Trier
  • Bulgaria: Finanzamt Neuwied
  • Croatia: Finanzamt Kassel-Hofgeismar
  • Czech Republic: Finanzamt Chemnitz-Süd
  • Denmark: Finanzamt Flensburg
  • Estonia: Finanzamt Rostock
  • Finland: Finanzamt Bremen-Mitte
  • France: Finanzamt Offenburg
  • Great Britain: Finanzamt Hannover-Nord
  • Greece: Finanzamt Berlin Neukölln
  • Hungary: Zentralfinanzamt Nürnberg
  • Ireland: Finanzamt Hamburg-Nord
  • Italy: Finanzamt München II
  • Latvia: Finanzamt Bremen-Mitte
  • Liechtenstein: Finanzamt Konstanz
  • Lithuania: Finanzamt Mühlhausen
  • Luxembourg: Finanzamt Saarbrücken
  • Macedonia: Finanzamt Berlin Neukölln
  • The Netherlands: Finanzamt Kleve
  • Norway: Finanzamt Bremen-Mitte
  • Poland I: Finanzamt Oranienburg (entrepreneurs whose surnames/for private companies and corporations whose name begins with A to M)
  • Poland II: Finanzamt Cottbus (entrepreneurs whose surnames/for private companies and corporations whose name begins with N to Z)
  • Portugal: Finanzamt Kassel-Hofgeismar
  • Romania: Finanzamt Chemnitz-Süd
  • Russia: Finanzamt Magdeburg II
  • Sweden: Finanzamt Hamburg-Nord
  • Switzerland: Finanzamt Konstanz
  • Slovakia: Finanzamt Chemnitz-Süd
  • Spain: Finanzamt Kassel-Hofgeismar
  • Slovenia: Finanzamt Oranienburg
  • Turkey: Finanzamt Dortmund-Unna
  • Ukraine: Finanzamt Magdeburg II
  • USA: Finanzamt Bonn-Innenstadt

Legal basis to be found in § 21 AO as well as in § 1 UStZustV.

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