You just started a new company in Germany or want to sell products in Germany via Amazon or eBay? Are you looking to grow your business in the German market? A German VAT number may be necessary for vat compliance. We will show you exactly the process, where, and how you can apply for your German VAT number, as well as how to file regular German vat returns. Our sophisticated information on German VAT rates does not substitute for a reliable tax consultant.
What is a VAT Identification Number?
The VAT Identification Number (VAT ID), Umsatzsteuernummer (USt-IdNr.) in German, is required in all EU countries when businesses sell goods or services to companies in other EU member states or purchase goods from them. It serves as identification for cross-border transactions and is used for intra-Community deliveries, where the reverse-charge procedure applies.
Under the reverse-charge procedure, the buyer is responsible for calculating and paying the VAT to the tax authorities. Normally, this responsibility lies with the seller, but under the reverse-charge, it is transferred to the buyer. This procedure is especially used for intra-Community deliveries and certain services, such as construction or consulting services.
For businesses, this means they can typically deduct the VAT paid if they are entitled to VAT deductions. Therefore, the VAT does not need to be paid upfront at the time of purchase but is instead accounted for in the tax return. This procedure simplifies tax processing for international transactions and prevents businesses from paying VAT multiple times. The VAT ID ensures that these regulations are applied correctly.
What Does the German VAT Number Look Like?
In Germany, the VAT registration number begins with the abbreviation DE, followed by nine digits. It therefore has the structure DE123456789. In other EU member states, the structure is similar. The VAT registration number begins with the EU country code. This is followed by up to twelve alphanumeric characters, depending on the country.
When is a German Umsatzsteuernummer Necessary?
In general, a German VAT number is not necessary if you are a freelancer, self-employed person, or entrepreneur who only provides or receives services within Germany. When issuing invoices, the tax ID issued by the German tax office is sufficient. A VAT ID number is also not required if goods are sold to private individuals across national borders in Europe. Additionally, small entrepreneurs (e.g., Einzelunternehmer, UG, GmbH) who use the small business regulation are generally exempt from the obligation to have a VAT identification number.
The Umsatzsteuernummer becomes mandatory as soon as products and services are sold to or purchased from business customers in the EU. These business relationships between companies in the EU are referred to as intra-community deliveries or supply of goods. The legal basis for this is regulated in detail by the Value Added Tax Act and the Federal Central Tax Office in Germany.
Foreign companies offering goods or services in Germany are generally required to register for VAT in Germany. This involves registering with the tax office responsible for them. Online platforms like Amazon or eBay often require a VAT certificate before you can start selling in Germany.
Examples of foreign companies that require a German VAT number include:
- Maintaining a German consignment warehouse and selling products to German customers
- Organizing live events (conferences, concerts, education) in Germany
- Using the German Amazon Fulfillment Service (FBA) as a foreign Amazon seller with delivery via the German warehouse
Are there any Exceptions to Needing a German VAT Number?
Yes, there are exceptions where a German VAT number (USt-IdNr.) is not required. These include:
-
Small Business Regulation: If your revenue is below certain thresholds (currently €22,000 in the previous year and €50,000 in the current year), you may be exempt from VAT obligations as a small business owner and not require a VAT number.
-
Non-profit Organizations: Non-profit organizations that do not charge VAT generally do not need a VAT number.
-
Exempt Goods and Services: If you only offer goods or services that are exempt from VAT, a VAT number may not be necessary.
If you're unsure whether you need a VAT number, you can contact the responsible tax office, a tax advisor, or us to clarify your specific situation.
Save Time and Effort Applying for the German Umsatzsteuernummer
In cooperation with our renowned tax advisors, we can help you save time and effort when communicating with the German tax authorities. Our services include:
- Compiling the necessary information and documents
- Assisting with responding to official inquiries
- Applying for a tax number and VAT identification number
- Monthly support, if needed
Need help with your business?
Simply enter your email and we will get back to you as soon as possible!
When to Apply for a German VAT Number?
German companies can apply directly when setting up the company. When registering for your freelance activity or your business (e.g., UG or GmbH) with the tax office, you must fill out the questionnaire for tax registration. In this questionnaire, you can also directly check the box for the VAT ID number request, and you will then receive it automatically. If you did not apply for the VAT ID number when founding your company, you can apply at the Federal Tax Office at any time, along with submitting periodic declarations to ensure VAT compliance.
If a foreign company generates turnover in Germany, this turnover is subject to turnover tax in Germany in the same way as for domestic companies. Foreign companies are those that do not have a registered office, management, or branch in Germany. To fulfill their VAT obligations, foreign companies may be required to register for German VAT, even if they do not have a physical presence in Germany. This can be done by appointing a tax representative in Germany, as required by the European Union. The representative will handle tasks such as filing VAT returns, paying VAT, claiming VAT refunds, and conducting tax audits on behalf of the company.
For VAT purposes, the company must register for VAT with the competent tax office as soon as it starts selling its products or services in the German market.
How to Apply for a German VAT Number
On average, the process of obtaining a VAT number takes about one to two months. There are significant differences depending on the location and workload of the tax offices. Generally, following up after submitting the application does not accelerate the process. You will receive your VAT ID number by post. There are no costs associated with applying for the VAT ID number.
Local German companies can apply for the VAT number either online or by mail. The online form is available here and can be used between 5 AM and 11 PM. The application must include the competent tax office, your tax number, the legal form (including the name, postcode, and town of the company or, in the case of a sole proprietorship, the surname, first name, and date of birth of the owner). The written application for the VAT identification number must be sent to: Bundeszentralamt für Steuern, Dienstsitz Saarlouis, 66738 Saarlouis, Fax: +49-(0)228-406-3801. The application must also include the name and address of the applicant, the competent tax office, and the tax number.
Foreign companies must apply at the responsible tax office. This is regulated by § 21 Abgabenordnung (AO) Abs.1 Satz 2. Most tax offices communicate only in German. You can find the complete list here.
Source: Ordinance on the local jurisdiction for turnover tax of entrepreneurs domiciled in foreign countries (Umsatzsteuerzuständigkeitsverordnung – UStZustV)
Conslusion
Applying for a German VAT number (USt-IdNr.) is an important step for businesses operating in Germany or within the EU. It is required if you supply goods or services to business customers in other EU countries or purchase from them. Specifically, businesses that take advantage of the small business regulation or do not engage in cross-border transactions are not obligated to have a VAT ID number.
If needed, you can contact the Federal Central Tax Office both online and by mail. The process usually takes one to two months and is free of charge. Foreign companies that generate turnover in Germany must also register for a VAT identification number. With our support, you can ensure that all tax obligations are correctly fulfilled and that your business operates in compliance with international tax laws.
