VAT or Value Added Tax in the EU is generally adopted consumption tax assessed on the added value of all goods and services. Germany builds its VAT rules based on laws, or Directives, issued from Brussels by the European Union. Read to learn some key points about VAT registration in Germany.
Let’s overview the list of people obliged to register for VAT in the European Union. Businesses registered in EU countries apply for VAT if their 12-month turnover approaches or exceeds a certain threshold. Each country independently sets the size of the threshold value and the time required for registration as a VAT payer. In Germany, the current threshold for VAT registration for both goods and services suppliers is €22,000. There are common scenarios when VAT registration in Germany is permitted. Here they are
Vat registration in Germany usually takes up to 3 weeks, although the terms may vary.
Even though VAT registration feels like an obligation, businesses can also benefit from it as well! There are three great benefits of being VAT registered that businesses can voluntarily enjoy.
Displaying your VAT number on all official documentation, website, and stationery will give your business a more trustworthy image. Most people are aware of the VAT threshold, so you give customers a more realistic image of what you are.
Once registered, you can demand refunds for all goods and services your business acquires. This is how your selling price remains competitive and you are able to recover from VAT on your costs.
You can reclaim VAT for certain items you purchased prior to registration. This requires a business to be operating for this length of time and keeping the VAT invoices and records for the period.
The standard Value Added Tax rate in Germany is 19.0%. However, certain categories of traders are subject to a reduced VAT rate. A reduced rate of 7% is applied to some foodstuffs, short-term hotel accommodations, some timber for industrial use, etc. The subject for zero taxation rate is intra-community and international transport except for road and rail and some inland waterways transport.
The process of VAT Registration in Germany with Chern & Co is a choice of enterpreneurs wishing to invest time on growing their business. We cooperate with our German partners who act as responsible for the submission of your VAT registration application to revenue. We stick to the same legal procedure so you do not have to worry about anything. Contact our managers to get a more extensive consultation about your particular case!
Disclaimer: The content of this page is for acquainting purposes only and is subject to change. It does not constitute any professional advice. No liability is accepted by Chern & Co for any actions taken or not taken in reliance on the information set out in this article. Professional, legal or tax advice should be obtained before taking or refraining from any action.
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Chern & Co Ltd is a licensed Trust and Company Service Provider (TCSP) in Ireland, authorised and supervised by the Department of Justice.
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