A guide to VAT in Germany

VAT Rates in Germany:
- Germany has different VAT rates for various goods and services.
- The standard VAT rate is 19 percent, but there are reduced rates of 7 percent and 0 percent for specific categories.
VAT Registration:
- Businesses operating in Germany must register for VAT if their annual turnover exceeds a certain threshold.
- VAT registration allows businesses to charge and reclaim VAT.
Invoicing Requirements:
- Invoices must include specific details, such as the seller’s and buyer’s information, invoice number, date, and a breakdown of VAT amounts.
- Electronic invoicing (e-invoicing) is increasingly common and must comply with legal requirements.
VAT Returns and Payments:
- Businesses submit regular VAT returns to the tax authorities.
- VAT payments are due at specific intervals (monthly, quarterly, or annually).
VAT Exemptions and Special Schemes:
- Some transactions are exempt from VAT, such as healthcare, education, and financial services.
- Special schemes exist for small businesses and travel agencies.
Import and Export Transactions:
- VAT applies to imports into Germany, but there are mechanisms for deferring payment.
- Exports are generally zero-rated for VAT purposes.