German-VAT- Guide on how VAT applies in Germany

Most goods and services in Germany are taxed at the standard rate of VAT which is 19%.

 

There are two rates of VAT in Germany:
 

• Standard Rate 19%

• Reduced Rate 7%

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Reduced Rate

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The reduced rate of VAT (7%) is applicable to goods and services such as:

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• Hotel Accommodation

• Museums 

• Theatres

 

Exempt Goods and Services

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• Medical Services 

• Insurance

• Property Sales

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Charging VAT

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Customer located in:

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• In German - 19% or 7%

• B2B customer outside EU - 0% 

• B2B customer in EU - 0%  (Reverse Charge Invoice

• B2C (to private individual) Less than 10,000 Euros - 19% VAT

• B2C (to private individual) Greater than 10,000 Euros -  VAT rate applicable in customers country. German business must either register in customers country or use the One Stop Shop Process.

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Broadcasting, Telecommunications, Electronically Supplied Services - Place of supply where customer located and as such apply VAT rate in customers country. 

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Input VAT Recovery

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Input VAT is deducted from output VAT to arrive at the net VAT payable on the VAT return

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E - Invoicing Guide - German Ministry of Finance  ​E-Invoicing

 

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