How to Pay VAT Online in Germany: A Guide for Online Sellers

As a business engaged in transactions in Germany, understanding and managing your Value Added Tax (VAT) obligations is crucial. This comprehensive guide will walk online sellers through the process of paying VAT online in Germany, ensuring compliance with the German tax authorities.

German VAT Returns

Any company registered with the German tax authorities as a non-resident VAT trader must report taxable transactions through periodic filings, known as returns.

Frequency of German VAT Returns

The frequency of your German VAT returns depends on your annual sales turnover. Here’s how it breaks down:

• Annual Return: All businesses must file an annual return.
• Quarterly Returns: If your annual sales range between Euro 1,000 and Euro 7,500, you must file quarterly.
• Monthly Returns: If your annual sales exceed Euro 7,500 or if you’re a newly registered company, monthly filings are required for the first two years.

Deductible German VAT

In addition to declaring sales or output VAT in the German return, companies can offset this by the corresponding input or purchase VAT. However, there are exceptions, such as staff telephony in non-business related cases and gifts.

Deadlines for Filing German VAT Returns

• Monthly or Quarterly VAT Returns: These are due on the 10th of the month following the tax period. It is possible to apply for a continuing month’s delay, but this will require a cash advance payment.
• Annual VAT Return: This summary of all transactions throughout the year is usually due by May 31st of the following year. However, for the tax year 2023, the deadline has been extended to August 31st, 2024.

Types of German VAT Returns and Their Formats

• VAT Return:
  • Monthly: Form UST 1A (PDF)
  • Quarterly: Form UST 1A (XML)
• Yearly Return:
  • Annually: FORM UST 2A (XML)
• EC Listing:
  • Monthly and Quarterly: ZM (Zusammenfassende Meldung)
  • Annually: ZM (Zusammenfassende Meldung)
• 8th Directive:
  • Annually: Vorsteuervergütungsantrag (XML)
• 13th Directive:
  • Annually: USt 1 T (XML)

Where to file German VAT returns

When a company is first VAT registered, it is allocated to one of the many German tax offices around the country based on the country of residency of the trader.

For example:

• French companies are allocated to Offenburg.
• UK companies are allocated to Hanover.
• US companies are allocated to Bonn.

For a comprehensive breakdown of tax office allocations for VAT returns based on company residency, please consult the official German government list available here.

German VAT returns have been filed electronically since 2013, with electronic authentication, over the internet.

German VAT penalties

Misdeclarations or late filings of German VAT returns may result in penalties for foreign companies. Late filings are subject to a charge of 10% of the VAT due, with a limit of €25,000. If the payment is delayed, there is a further charge of 1% of the VAT due per month overdue. There is a four-year statute of limitations for German VAT, except for fraud, in which case it is extended to ten years.

Recovery of German VAT credits

If there is a surplus of VAT inputs over outputs (more VAT incurred than charged), a German VAT credit arises. This should theoretically be refunded within three months by ticking a box in the German VAT return. However, this may trigger a VAT audit by the tax authorities. Otherwise, the credit is rolled over to the next filing.

Understanding and fulfilling your German VAT obligations is essential for smooth operations in Germany. For professional guidance and support in handling German VAT compliance and payments, consider consulting experts in VAT matters. They can provide you with invaluable insights and assistance tailored to your unique situation.

Expert assistance from hellotax for online sellers

Navigating the complexities of VAT compliance, returns, and related questions can be challenging for online sellers. This is where services like hellotax come into play.

hellotax specializes in VAT compliance and offers a range of solutions specifically designed to address the VAT requirements of online sellers. They can assist you with expert guidance to ensure that you make informed decisions that benefit your online business while maintaining full compliance with German tax regulations.

While handling your German VAT payments, it’s wise to have a reliable partner like hellotax by your side, ready to provide invaluable insights and assistance tailored to your unique situation. Don’t hesitate to reach out to hellotax for further information and expert support in managing your German VAT obligations.