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Germany

 

News & Tips

Call-off stock – New decision from German Federal Court (BFH 20/10/2016, V R 31/15)

According to the German tax authorities, the supply of goods from other EU Member States via call-off stock located in Germany should be deemed to be an intra-Community supply of goods followed by a domestic supply by the supplier. This results in general in VAT reporting obligations for the supplier in Germany. The BFH however ruled that a supply via a call-off-stock where the final customer was identified at the beginning of the transfer from the EU Member State of dispatch and where a binding order existed on that date should be considered as a direct intra-Community supply.


Due date for payment - Extension [Tip]

Preliminary VAT returns must be filed and VAT due should be paid no later than the 10th day of the month after the tax period [month/quarter] to which it relates. Given the tight time-schedule between the end of the period and the payment deadline, a permanent extension of one month can be applied for according to a specific procedure. In case of monthly submission, this requires the payment of a so-called special prepayment which is set off against the VAT liability of December. The amount is calculated by 1/11 of the VAT due in the previous year.


Intra-EU supply of goods in a chain transaction ABC – Transport imputation

In case of two subsequent supplies of goods, whereby the goods are transported from one Member State to another one, only one supply of goods qualifies as a supply of goods with transport. The other supply of goods is a supply without transport. In the field of the European Court of Justice jurisprudence, the German Federal Tax court has rendered two interesting rulings [XI R 15/14 & XI R 30/13 dated 25.02.2015] enabling to determine in which relationship [A-B] or [B-C] the transportation takes place. German tax authorities will need to change their official administrative guidelines accordingly.


 More VAT News & Tips - Germany

DOING BUSINESS IN GERMANY [DE] - VAT GUIDE

 

General

VAT Directive

Germany

What is the structure of the VAT number?

Each individual VAT identification number shall have a prefix in accordance with ISO code 3166 - alpha 2 - by which the Member State may be identified.

 

There are two VAT numbers in Germany: the general tax number and the so-called EU VAT number [Ust-ldNr.] used for intra-EU transactions. German VAT numbers have 11 characters [DE + 9 digits]. The last 2 digits constitute a control number. 

 

What is the local name of the tax?

 

German VAT is known as "Umsatzsteuer" [Ust] or "Mehrwertsteuer" [MwSt]

 

VAT rate

VAT Directive

Germany

 VAT rates

Member States must apply a standard VAT rate [not lower than 15%] which must be the same for the supply of goods and for the supply of services.

Member States may apply either one or two reduced rates [not lower than 5%] only to supplies of goods or services as listed in the Annex III of the VAT Directive.

 

Germany applies a standard VAT rate of 19% and one reduced rate of 7%.

 

See VAT rates applied in the EU.  

VAT return

VAT Directive

Germany

How is the tax period determined? 

The tax period shall be set by each Member State at one month, two months or three months.

Member States may, however, set different tax periods provided those ones do not exceed one year. 

Monthly/Quarterly

Your company has to report its VAT position by filing preliminary VAT returns on a monthly basis where [net] VAT due in previous calendar year exceeds the amount of € 7.500 [and also within the first two years for newly incorporated companies].

Preliminary VAT return has to be filed quarterly if [net] VAT due in previous calendar year is lower than € 7.500. If the net VAT due in the previous calendar year did not exceed € 1.000, no preliminary VAT returns have to be filed but only the annual VAT return.

 

When should periodical VAT return be filed?

The VAT return shall be submitted by a deadline to be determined by Member States.

That deadline may not be more than two months after the end of each tax period.

 

Preliminary VAT returns must be filed by electronic means via "Elster" to German VAT authorities before the 10th day of the month [10 of N+1] following the tax period [month/quarter] to which it relates.

It is possible to apply for a permanent time prolongation of one month which requires a special prepayment. The amount is calculated as 1/11 of the VAT due in the previous year and is set off against the VAT liability of December. 

Statement

VAT Directive

Germany

Annual recapitulative statement

Is this requirement laid down in the country and what is the filing deadline?

Member State may require taxable persons to submit a return in respect to all transactions carried out in the preceding year.

That return shall provide all the information necessary for any adjustments.

 

Your company has to file an annual summary return [Umsatzsteuererklärung] in Germany.

The Statement should be filed by electronic means before May 31st of the next calendar year. A filing extension [up to December 31st] can be obtained upon request.

Recapitulative statement of intra-EU supply of goods [European Sales Listing - ESL]

Are quarterly filings allowed by the country and what is the filing deadline?

The recapitulative statement shall be drawn up for each calendar month.

However, Member States, in accordance with the conditions and limits which they may lay down, may allow taxable persons to submit the recapitulative statement on each calendar quarter where the total quarterly amount ofiIntra-EU supplies of goods does not exceed either in respect of the quarter concerned or of any of the previous four quarters the sum of € 50.000 or its equivalent in national currency.

The recapitulative statement shall be submitted within a period not exceeding one month.

 

The recapitulative Statement [ESL] must be filed  on a quarterly basis provided the intra-Community of goods do not exceed € 50.000 in the current calendar quarter and the past four calendar quarters.

If the above threshold is exceeded, the Statement must be filed on a monthly basis.

The Statement must be filed by the 25th of the month following reporting period [month/quarter]. 

Payment

VAT Directive

Germany

What is the payment deadline?

Any taxable person liable for the payment of the VAT must pay the net amount of the VAT when submitting the VAT return. 

Member States may, however, set a different date for payment of that amount.

 

 

The VAT due should be paid by filing deadline for the preliminary VAT return no later than the 10th day of the month after the end of the tax period [month/quarter] to which it relates.  

If the tax due on the basis of the annual VAT return exceeds the interim payments or no provisional returns were submitted, the balance due must be paid within one month following submission of the annual VAT return to the tax office. Late payment causes surcharges of 1% of the net tax payable.

 

Are interim payments required?

Member States may require interim payment to be made.

The payment made on the basis of the monthly or quarterly provisonal returns are actually interim payments.

 

VAT refund

VAT Directive

Germany

VAT refund for companies VAT registered in the country.

Is any VAT credit automatically carried forward or refunded?

Where, for a given tax period, the amount of deductions exceeds the amount of VAT due, the Member States may, in accordance with conditions which they shall determine, either make a refund or carry the excess forward to the following period. However, Member States may refuse to refund or carry forward if the amount of excess is insignificant.

 

No carry-forward mechanism. Refund is done immediately [generally within one month from the deadline for submission of the annual VAT return].

Special measures for foreign companies

VAT Directive

Germany

Optional reverse charge [art. 194 of the VAT Directive] for non-resident supplier.

SUPPLY OF GOODS

Member States in which the VAT is due may provide that the person liable for the payment of VAT is the person to whom the goods or services are supplied where the transaction is carried out by a taxable person who is not established in the country in which the VAT is due.

 

No

Reverse charge mechanism is not applicable to major domestic supplies of goods [except for supplies of goods with installation and some other specific items].

Optional reverse charge [art. 194 of the VAT Directive] for non-resident provider.

SUPPLY OF SERVICES

Member States in which the VAT is due may provide that the person liable for the payment of VAT is the person to whom the goods or services are supplied where the transaction is carried out by a taxable person who is not established in the country in which the VAT is due.

Yes

Reverse charge mechanism is applicable to major domestic supplies of services [except for admission to trade fairs, exhibitions and conferences and other specific items].

Have simplification measures been taken to avoid registration of the foreing company for the goods held on consignment in the country?

 

No

No simplification measures are available for consignment stock.

Foreign taxpayers are therefore required to be registered for VAT purposes in Germany.

Special rules are however applicable for commissionaire agreement.

 

Do special arrangements apply to "call-off-stock"?

 

No

No simplification measures are available for call-off-stock.

Foreign taxpayers are therefore required to be registered for VAT purposes in Germany.

Special rules are however applicable for commissionaire agreement.

 

Triangulation can be applied when the middleman [B] is VAT registered [as a non-established company] for others supplies in the 3rd country [Member State of destination]?  

Triangulation regime can be applied even if the middleman B is VAT registered as a non-established company in Germany [Member State C].

The special regime is also applicable if more than three parties are involved, provided the last three parties in the chain fulfill the requirements for the triangulation scheme.

 

VAT on import

VAT Directive

Germany

VAT warehousing regime

Member States may exempt the importation of goods and the supply of goods which are intended to be placed under warehousing arrangements other than customs warehousing.

 

Yes

Germany has introduced VAT warehousing regime applicable under specific conditions.

VAT on importation – Postponed accounting via the VAT return.

Is it possible for a company to pay the import VAT via the periodical VAT return?

Member States may provide that VAT on importation does not need to be paid at the time of importation on condition that it is entered as such in the VAT return  to be submitted.

 

No

Postponed accounting via the VAT return is not possible in Germany. Import VAT needs to be paid to the customs authorities upon importation [immediate payment].

A deferred payment for VAT and customs [similar delay] is however possible under specific conditions.

 

Miscellaneous

VAT Directive

Germany

Intrastat Threshold  

Dispatches: € 500,000

Arrivals : € 800,000 

Distance Sales - Threshold  

 € 100,000

See various thresholds applied in the EU

 

Ministry of Finance   website

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