How to correct German overcharged VAT

Where a company overcharged VAT , this company can only recover the amount paid to the authorities once it has refunded the VAT collected from the customer.

26 February, 2016


This requirement was introduced by the amended decree on German VAT refunds.

Different reasons can lead businesses to overcharge VAT. The incorrect VAT rate to the relevant product may be used or the VAT may be charged on an exempt or zero rated transaction. In case of exempt businesses, overcharged output VAT can only be reclaimed when the input side was not recovered. In these cases, a letter should be sent to the tax authorities.


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