Germany, as Europe’s largest economy, is a top destination for businesses expanding into the European Union. If you are selling goods or services in Germany, one of your key tax responsibilities is filing VAT (Value Added Tax) returns. Understanding how VAT works in Germany—and how to file your returns correctly—is crucial for legal compliance and business success.
This article covers everything you need to know about VAT return filing in Germany, including registration, deadlines, procedures, and best practices.
What Is VAT in Germany?
Value Added Tax (VAT) in Germany is known as "Umsatzsteuer" and applies to most goods and services supplied in the country. It is a consumption tax collected at each stage of the supply chain and ultimately borne by the end consumer.
As a business, if your annual turnover in Germany exceeds the threshold or if you engage in cross-border transactions, you must register for VAT and file returns accordingly.
VAT Rates in Germany
Germany applies three VAT rates:
- Standard Rate – 19%: Applies to most goods and services.
- Reduced Rate – 7%: Applies to specific goods and services such as books, newspapers, and certain food items.
- 0% Rate (Exemptions): Exports, intra-community supplies, and some financial or medical services are exempt from VAT.
Correctly identifying and applying the relevant rate is essential when issuing invoices and filing returns.
Who Needs to File VAT Returns in Germany?
Any business or individual that is registered for VAT in Germany must file VAT returns. This includes:
- German businesses exceeding the turnover threshold
- Foreign companies supplying goods/services in Germany
- E-commerce sellers targeting German customers
- Importers and exporters dealing with German clients
Even if no VAT is due in a period, filing a nil return is mandatory.
VAT Registration Requirements
Businesses must register for VAT in Germany when:
- Their taxable turnover exceeds €22,000 in the previous calendar year and €50,000 in the current year
- They make distance sales to German consumers over the EU threshold
- They import goods into Germany
- They provide services subject to VAT under German rules
Once registered, the business receives a German VAT number and is legally obligated to submit VAT returns on a monthly, quarterly, or annual basis depending on turnover.
VAT Return Filing Frequency and Deadlines
Filing frequency depends on the previous year's turnover:
- Monthly: Required for new VAT payers or businesses with VAT liability over €7,500/year.
- Quarterly: Standard for businesses with liability under €7,500/year.
- Annually: Only for very small businesses (less than €1,000/year VAT liability).
Deadline: Returns must be submitted by the 10th of the following month. Businesses can request an extension ("permanent deadline extension") which provides an extra month for filing.
For example, the January VAT return would be due by February 10, or March 10 if the extension is granted.
How to File VAT Returns in Germany
Filing VAT returns is an online process using the Elster (German Tax Authority) portal. The process includes:
- Log into the Elster portal using your business credentials.
- Complete the VAT return form (Umsatzsteuer-Voranmeldung).
- Report output tax collected on sales and input tax paid on purchases.
- Calculate the VAT due or refundable.
- Submit the return electronically and arrange payment if VAT is due.
It’s important to maintain proper VAT-compliant invoices and supporting documents for all transactions reported.
Importance of Accurate VAT Compliance
Germany has strict rules around VAT compliance, and non-compliance can result in:
- Financial penalties
- Interest on unpaid VAT
- Tax audits
- Blocking of VAT refunds
Ensuring timely and accurate submissions helps businesses avoid disruptions and maintain credibility with clients and authorities.
Claiming VAT Refunds in Germany
If your input tax exceeds output tax, you are entitled to a VAT refund. The amount can be carried forward to future returns or refunded directly by the tax office. Refunds are typically processed after a review by the authorities and may require supporting documentation.
Foreign businesses not established in Germany but incurring German VAT (e.g., for exhibition costs, hotels, local purchases) may also file a VAT refund application under the EU Refund Directive or 13th Directive, depending on their country of residence.
Get Expert Help with VAT Filing
Navigating VAT regulations in Germany can be complex—especially for foreign companies unfamiliar with local tax systems. Filing errors, missed deadlines, or incorrect invoices can lead to financial and legal issues.
To simplify your compliance process and avoid penalties, refer to this comprehensive blog guide for a detailed walkthrough:
👉 https://easetocompliance.com/vat-return-filing-in-germany/
The article offers step-by-step insights on VAT registration, return filing, payment procedures, and common mistakes to avoid.
Final Thoughts
Understanding and meeting VAT obligations in Germany is a key part of operating legally and efficiently within the EU market. Whether you are a new entrepreneur, e-commerce seller, or a growing company entering the German market, accurate VAT return filing is non-negotiable.
By staying informed, maintaining good records, and using expert support where needed, businesses can ensure full compliance and focus on their core operations. Start your VAT compliance journey with confidence by reading the full guide linked above.