Expanding is always a great and easy with for online sellers to maximize their sales. With its population of over 82 million, the German market offers advantageous varieties and possibilities. If you are planning to expand your commodity business to Germany or want to store goods there, you must register for VAT. In the following article, we explain you everything about the German VAT number.
Antonia KlattLast Updated on 23 May 2022
What is a German VAT number?
An VAT number in Germany is the German VAT ID. This number, along with any other foreign VAT ID is needed to sell legally in the country which assigned the VAT number. Not only that! You will also need a VAT number in Germany to rent storage facilities or to provide bills and invoices to customers in Germany among other tasks. You will receive an VAT number in Germany once you have completed a VAT registration.
Registration for VAT in Germany
As a seller from abroad, you must register for a German VAT number for two major reasons. Firstly, the German delivery threshold oversteps the limit of 100,000 EUR per year and secondly the temporary storage of goods within German borders.
VAT registration threshold in Germany
Until recently, when selling from the EU to another member state, you were liable for VAT in the country you were selling from until you reached the VAT threshold limit of the country of import. As soon as your annual turnover of sales from one EU country (let’s say France) to another one (e.g. Germany) exceeded this limit, you needed to register for VAT in the country of import (in this case Germany). The VAT threshold was set differently in each country, in Germany for example at 100,000 EUR.
By overstepping the limit of 100,000 EUR when selling to Germany as a foreign seller, a German VAT number became mandatory. From this point on, you paid tax on your sales in Germany. However, if your turnover remains under 100,000 EUR per year, you only pay VAT in the country of export.
Update: On July 1st 2021 a new EU-wide threshold was introduced and set at 10,000 EUR. The new threshold replaced all country threshold and takes all intra-European sales into account. Sellers become liable for VAT in every country they are selling to once the combined revenue through cross-border transactions passes the threshold limit of 10,000 EUR.
Keep in mind that the application time for your VAT ID might take some time. If you are planning to expand your business to Germany and you estimate a cross-border turnover of more than 10,000 EUR in the EU, then you should start your registration early to avoid trouble with the German tax system.
Storage in Germany
Besides the delivery threshold, there is another reason to register for VAT in Germany: Namely, if you store goods of yours in Germany. This storage is accompanied by a direct VAT liability. The transfer of your goods to Germany as a non-German trader is called an intra-community transfer and can be compared to a cross-border delivery to yourself. Thus, it is tax-free, but still associated with obligations to provide proof in the form of pro forma invoices.
How hellotax can help you with a German VAT number
If your goods are stored in Germany or you sell goods to German customers while your cross-border revenue in Europe cross the EU-wide delivery threshold, you need to register for VAT in Germany and obtain a German VAT number. Thanks to our team of local tax accountants, hellotax can take care of the applications in the national languages of several European countries and simply let you know once you have received your new German VAT number. We also take over all tasks that come with a VAT ID, for example the regular submission of VAT returns in Germany. If you are interested in individual information and a way to automate VAT duties, don’t hesitate to contact us! Book a call today!
Register for VAT in Germany
Submit VAT Return in Germany
VAT number: What is its German name and format?
In Germany, the VAT number is referred to as the “Umsatzsteuer-Identifikationsnummer” (short: USt.-ID) or VAT identification number and is a basic requirement for every company with international deals subject to VAT in Germany.
The format of the German VAT number is DE 123456789 by default and divided into the country code (DE) and a nine-digit number. In Germany, however, there is a special feature, namely two tax numbers. One is the VAT number and the other is simply called “Steuernummer” or tax number. German companies receive the tax number first and it is a prerequisite for communication with the tax office, for advance VAT returns, etc. The tax number is usually issued first. The VAT number is usually only relevant for international business.
|Format||DE + 9 digits|
How to obtain a German VAT number?
As soon as you realize that you might reach the delivery threshold of 10.000,- EUR this year while selling goods to German customers, you should apply for the German VAT number, so that you will have it as soon as you reach the sales threshold. Depending on where your company is located, different tax offices in Germany are relevant for your application. For example, as a merchant from the United Kingdom, the tax office Hannover-Nord is responsible for your concerns.
What documents are required?
First, fill out the corresponding questionnaire provided in German. You then send the completed questionnaire by e-mail to the Hannover-Nord tax office. The office will provide you with detailed information on its website.
Required documents for your German VAT ID application:
- VAT certificate to prove the business is registered for VAT elsewhere in the EU, if appropriate
- Memorandum of Association (copy)
- Articles of Association (copy)
- An extract from the company’s national trade register
- Proof of the planned business (e.g., contracts or bills)
Some of the documents may have to be translated into German by a certified translator prior to submission.
You can simplify your VAT registration by choosing hellotax. Your own hellotax registration assistant will guide you through the process step by step directly in the hellotax tax software. You will only need to submit your documents once. We translate them and reuse them for any registration necessary – now and in the future. Based on your transaction data we let you know when you need a new VAT registration, apply for it, and let you know once we have received a new VAT number. You’ll never miss a deadline. Furthermore our team of local tax accountants can take care of VAT duties in foreign EU countries and can replace local tax advisors in Germany and beyond. They also take care of VAT returns in Austria! Book a call with our VAT experts to find out more.
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Our VAT experts are happy to help you. Book a free consultation today!
VAT returns in Germany – when and how often?
How often and when you have to submit your VAT returns depends on the turnover you generate in Germany. The responsible tax office will tell you when and how often the VAT returns are due. Three periods are distinguished:
- Every month: If your VAT liability was more than 7,500 EUR in the previous year, you must file your VAT returns every month in the following year.
- Every quarter: If last year’s VAT liability was between EUR 1,000 and EUR 7,500, your VAT returns must be submitted every three months.
- Every year: If you had a VAT liability of less than EUR 1,000 in the previous year, you must file your VAT returns annually.
If you do not have figures from the previous year, e.g. because you are running a new company, you have to estimate your annual sales. Based on this, the tax office will tell you how often and when you have to file your VAT returns.
VAT number exemption in Germany
As a foreign trader, you do not need a German VAT identification number if your annual net turnover with sales to Germany is below the delivery threshold of EUR 100,000. However, as soon as this threshold is reached or exceeded, you will need one immediately.
How to find a German VAT number
With the so called VIES tool of the European Commission it is possible to check VAT numbers of your or other companies in Germany. This is especially relevant if you want to work with other companies or if you invoice them or receive invoices from them. If they enter a wrong VAT number, this can lead to complications in your business. With a prior check of the VAT number you are on the safe side.
On the website of the European Commission there is the tool VIES VAT number validation, where you can specify in which country you are looking for a VAT number and which VAT number specifically. If the VAT number is actually available, it will be displayed accordingly. If the tool shows you that the VAT number is invalid, this can have several causes:
- The VAT number was not activated for transactions within the EU.
- The registration of the VAT number is not yet completed.
- The VAT number does not exist.
If you search for your company and receive a message that the VAT number is invalid, you can check with your local tax office to find out the reason. Your VAT number may still need to be activated for cross-border trade within the EU. The process varies depending on the country.
The German VAT number is only relevant for you if you are expected to reach the delivery threshold. At that moment you must have a German VAT number, which you can apply for at the tax office Hannover-Nord. The process from application to provision of the number can take up to ten weeks and should be planned accordingly.
You must apply for your VAT number at your local tax office. Depending on the country you come from, a different tax office is responsible for you. As a company of the United Kingdom, the tax office Hannover-Nord is responsible for you.
If you use warehouses in Germany as intermediate storage for your goods, you must register for VAT in Germany. The same applies if your sales to German customers exceed the Europe-wide delivery threshold of EUR 10,000.
The German VAT number consists of eleven characters. The first two are the country code DE, followed by nine digits. The German VAT number thus has the following format: DE123456789.