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More VAT News & Tips - Germany

You will find below VAT news & Tips for Germany


Annual VAT Return – Extended Deadline 

The German Authorities announced that the deadline for filing annual VAT returns is being extended. Currently the annual VAT return must be submitted by May 31st of the following calendar year. As from 2018, this deadline will be extended to July 31st of the following year (i.e. the annual VAT return for 2018 will have to be filed by July 31st 2019) .

Intrastat threshold – Modification on 01/01/2016

As from 01/01/2016, Intrastat threshold for “arrivals” will be increased from € 500.000 to € 800.000. Intrastat threshold for deliveries remains unchanged at € 500.000 [cf. federal Council Journal n° 304/15  03/07/2015.

Local reverse charge in the construction sector extended to operation facilities and equipment

Local reverse charge on construction works has been extended with effect of 06/11/2015 and is now also applicable to operating facilities and equipment [any item, equipment or machine permanently installed in building or construction which cannot be moved without destroying or altering the building or construction (art. 13b, §2 n° 4 of the German VAT Act)].

Mandatory mentions on invoice - Right of deduction

With regards to the formal conditions governing the right of deduction, taxable persons must hold an invoice drawn up in accordance with VAT Directive. The invoice must mention the full name and address of the supplier and the customer.

The Federal Tax Court [BFH] denied the right to deduct because only the PO Box address of the supplier was mentioned on the invoice and not his full address [B.F.H. 22.07.2015 – VR 23/14].

A careful review of the formal aspect of invoices received in Germany should be implemented before submitting a request of reimbursement via the procedure laid down by the 9th Directive or before a VAT audit from the authorities if your company is VAT registered in Germany.

Export of goods [BMG guidance of 19/06/2015]

Export of goods is taxable in the Member State of departure of the goods but can be exempted provided the supplier has documentation proving the goods have been effectively shipped outside the EU. German VAT authorities have now published a new guidance in connection with documentation proving the export of goods when using ATLAS system [German electronic export procedure] for export declaration in another Member State [EDIFACT print out is no longer required].

Proof on intra-EU deliveries

Intra-EU deliveries of goods are exempted from VAT in the country of departure of the transport provided the supplier can evidence the goods have effectively been shipped to another EU Member State. 

In the case at hand, the VAT exemption was challenged by German tax authorities because the documents provided by the German supplier proving the goods have been effectively shipped to Italy were incomplete and confusing [the final destination of the goods was unclear]. Supreme German Court confirmed the German authorities’ position considering the supply could not be VAT exempted and was subject to German VAT. The supplier did not provide the documentary evidence required in the prescribed form. The need for destination details in documents related to intra-EU transactions was indisputable.

The fact that the supplier during the legal procedure communicated the written confirmation from its client [witness statement] that the goods had been taxed in Italy [final destination of the goods] was deemed irrelevant [BFH 14/14, 19/03/2015].

If your company supplies goods from Germany to another Member State and invoices without VAT [intra-EU delivery exempt], you should analyze in depth the documentation to be provided as evidence of the shipment in order to avoid any VAT litigation in case of VAT audit.

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.

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New 13th Directive refund procedure

Foreign companies not established in the E.U. which acquire goods or services for business purposes in Germany may under certain circumstances obtain the refund of VAT they have been charged through the VAT refund scheme as laid down by 13th Directive.

As from 01/07/2016, the application needs to be filed via the online portal of the Federal Central Tax Office. In order to file applications, prior registration for the procedure is required. Transmission of applications will no longer be permissible by post. Be aware that the entire new process [registration and online submission] is available in German only !!!

Conference organizer - New administrative guidelines

The German VAT authorities have published new administrative guidelines clarifying the VAT treatment of services provided by a Congress center. The VAT treatment applicable to trade fairs exhibitions is now also applicable to congresses. In case at least three other services are provided in accordance with a contract in addition to the transfer of use of stand spaces, the services will be considered as a single service taxable where the recipient is established according to general rule.

However, this rule will not apply to hotel accommodation and catering services [which are treated independently and remain taxable in Germany]. The new rules are applicable from 01/06/2015.

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VAT refund - Germany referred to Court over its rules on VAT refunds for non-EU operators – 09/2014

The European Commission has decided to refer Germany to the European Court of Justice regarding its rules on VAT refund applications which discriminate against non-EU operators. Under German VAT legislation, taxable persons established outside the EU must personally sign the application form to be refunded VAT charged on goods or services. Operators established in Germany or in the EU, on the other hand, can authorize a third person to sign or submit their refund form to recover VAT.

The Commission considers that the German requirement for third country operators goes against the principles of effectiveness, proportionality and equivalence laid down in EU law. There is no provision under EU legislation which requires VAT refund forms to be personally signed. Moreover, requiring a personal signature from non-EU operators, but not EU ones, can make it excessively difficult for those not established in the EU to obtain a VAT refund. The Commission considers that Germany's stated aim of combatting tax evasion and ensuring a proper refund procedure could be achieved through other means, such as the appointment of a tax representative.

The Commission sent a reasoned opinion to Germany in September 2012 asking for these rules to be amended (see MEMO/2012/708). However the German authorities did not bring their rules into conformity with EU law.

VAT shall be refunded to taxable persons who are not established within the territory of the Community in accordance with the detailed implementation rules laid down in Directive 86/5620/EEC [art. 171 (2) of the VAT Directive].


Supply of goods – Local reverse charge on specific goods

Reverse charge mechanism has been implemented in the German VAT Act [since 01/10/2014] and is applicable under conditions for domestic sales of mobile phones, tablets computers, games console and precious and non-precious metals.

Member State may provide that the person liable for the payment of VAT is the taxable person to whom the supplies of goods or services as listed are made [art. 199 and sub. of the VAT Directive].

Intra-EU supply of goods – Documentary evidence of intra-EU supplies – Entry certificate

Company must hold a “Certificate of Entry” [Gelangensbestätigung] duly completed by the customer proving the effective shipment of the goods outside Germany [measure applicable since 01/10/2013]. In transport cases [situation where the goods are moved with own means of transport, as opposed to dispatch cases], the entry certificate is the only admissible evidence proving the shipment of the goods outside Germany. In dispatch cases [situation where the transport is done by an independent third party, such as a freight forwarder], alternative documents can however still be used as a proof.

The entry certificate may be drawn up in German, English or French. Using another language requires a legally certified translation. You will find here a template of the certificate.

Member States shall exempt the supply of goods dispatched or transported to a destination outside their respective territory but within the Community, by or on behalf of the vendor or the person acquiring the goods, for another taxable person. The exemptions provided for in the VAT Directive shall apply without prejudice to other Community provisions and in accordance with conditions which the Member States shall lay down for the purposes of ensuring the correct and straightforward application of those exemptions and preventing any possible evasion, avoidance or abuse [art. 131 & 138 of the VAT Directive].

Export of goods – Documentation requirement - ATLAS

Companies must hold an electronic statement from “ATLAS” (Automated Tariff and Local Customs Clearance System) to prove the effective export of the goods outside the Community. The Electronic Export Certificate [Ausfuhrvermerk) is considered to be a sufficient proof of export, irrespective of whether the goods are transported or dispatched. Other documentation (e.g. airway bills, freight forwarder certificates, etc.) should however be accepted under exceptional circumstances.

Member States shall exempt the supply of goods dispatched or transported outside the Community by or on behalf of the vendor or by or on behalf of a customer not established within their respective territory. The exemptions provided for in the VAT Directive shall apply without prejudice to other Community provisions and in accordance with conditions which the Member States shall lay down for the purposes of ensuring the correct and straightforward application of those exemptions and of preventing any possible evasion, avoidance or abuse [Art. 131 & 146 of the VAT Directive].

Tax withholding for construction work

The German legislator has established a procedure for safeguarding tax claims in order to curb illegal activities in the construction industry. Under said stipulations, recipients of services [principals] must deduct 15 % from the remuneration for services provided within Germany and pay it to the responsible tax office. The consideration is the remuneration paid for the construction service plus the statutory VAT.

It is however possible, under certain conditions, to waive the deduction obligation if the provider, at the time of payment, presents a valid certificate of exemption. 




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