VAT Returns in Germany
Frequency of German VAT returns
German VAT returns are filed monthly when the total VAT payable the previous calendar year exceeds €7,500. If payable VAT is below this amount, VAT returns are normally filed on a quarterly basis.
Businesses filing quarterly VAT returns can request a change into monthly filing when the total amount of refundable VAT in the prior year exceeds €7,500.
Finally, if the total amount of VAT payable does not exceed €1,000 in the prior year, the company is allowed to file VAT returns annually. This is, quarterly and monthly VAT returns are not required when the VAT paid the previous year is below this amount.
Frequency of filing
MonthlyVAT payable the prior year exceeds €7,500. Monthly filing may be granted upon request where the repayable amount the previous year exceeded €7,500
QuarterlyVAT payable the prior year does not exceed €7,500
AnnualVAT payable the prior year does not exceed €1,000
German VAT due dates
As a general rule, periodic VAT returns in Germany must be filed and paid by the 10th day of the month following the reporting period. In case the "Dauerfristverlängerung" extension applies, the due date is extended to the 10th day of the second month following the reporting period. For example, the first quarter VAT return is normally due by 10th April, but if the due date extension applies, the date is shifted to 10th May.
The Annual summary VAT return is normally due the last day of July of the year following the reporting period. However, if filed by a recognised tax consultant, the due date is the end of February of the second following year. For example, the 2018 Annual VAT return is normally due by 31st July 2019, but the due date is shifted to 28th February 2020 if submitted by a recognised tax consultant. These are recently updated deadlines as announced in our newsletter.
If the due date falls on a Saturday, Sunday or bank holiday, the date is shifted to the next working day. Public bank holidays change from one region to another, therefore, it is recommended to double check with Marosa before taking them into account.
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Dauerfristverlängerung. VAT return filing extension in Germany
German VAT registered companies can get a one-month due date extension to file their VAT returns, this authorization is called "dauerfristverlängerung". The due to file VAT returns in Germany is the 10th day of the month following the reporting period. For example, your March (or first quarter) VAT returns are normally due on 10 April. With the extension, the due date to submit and pay your March (or first quarter) German VAT return is 10 May.
How to get the "dauerfristverlängerung" filing extension?
The application for the dauerfrist is made electronically through ElsterOnline, the electronic filing system of the German tax authorities. The application must be filed by the due date to submit your VAT return for the last period of the year. In addition to the application, companies filing monthly VAT returns must make a prepayment of 1/11 of the VAT paid during the previous year (in case the overall year was on a recoverable position, no prepayment is required). This prepayment can be recovered at the end of the year via the December return. However, a new prepayment will be calculated and paid to the authorities every year.
German VAT payments
VAT payments are made to the IBAN number of the competent tax authorities. These bank details change for each taxpayer depending on the local office where they are VAT registered. The correct IBAN account is stated in the confirmation of VAT registration issued by the tax authorities. It is important to check these bank details before making the payment.
The reference in the bank transfer must include the tax number (Steuernummer) and the period that is being paid. If there is another reason for the payment like penalties or corrective returns, it should also be included in the reference.
All bank transfer costs must be paid by the taxpayer.
German VAT refunds
VAT Refunds are reimbursed automatically by the tax Authorities. There is no additional form or requirement to be met, VAT will be refunded as per the amounts indicated in the VAT return submitted. These refunds are made monthly or quarterly depending on the frequency of filing of the registered business.
VAT refunds will be transferred by the tax authorities to the bank account provided when registering the company. In case the bank details were not provided, they can be provided to the authorities by writing a letter. These details may be also requested by the authorities, in which case a form will be received in paper that needs to be completed and sent back to the tax office.
German nil and corrective VAT returns
In case no transactions need to be reported in a given period, a nil VAT return must be filed. There are no specific requirements other than include 0.00 in the final VAT position.
Regarding corrective VAT returns, where there is a change on the output or input VAT reported in a given period, a corrective VAT return must be filed replacing the return previously submitted.
- These returns are due for both, changes on the input and changes on the output VAT
- The corrective return completely replaces the previously submitted return. There is no "supplementary declaration" in Germany
- Corrections in the annual summary VAT return are generally not accepted. Only where the amounts to be corrected are low and the VAT position is not very different, these corrections would be accepted
- Once the annual summary VAT return has been submitted for a given year, any subsequent correction should be done by correcting this annual return. No corrections are allowed for the monthly or quarterly VAT returns once the annual return is filed
- Corrective returns must be filed electronically
VAT penalties in Germany
Late filingIn practice these are often not applied. However, according to the law, a penalty of up to 10% of the assessed VAT can be charged with a maximum limit of €25,000
Only penalty is a 1% interest per month on the amount due.
In addition, if VAT is not paid in 16 months following the end of the year in which VAT became due, late payment interest of 0.5% should be added monthly
Late registrationNormally, no penalties for late registration. However, the authorities may impose penalties for late registration in case of long delays or voluntary errors.
Additional penalties may be charged by the authorities, particularly where the corrections are triggered by an investigation or VAT audit.
For penalties on ECSL, Intrastat and other returns, please see the relevant section.
German distance sales. VAT on e-commerce
You can find more information about the EU wide VAT regime on distance sales in our article about this topic in our website.
These are some of the rules applicable in Germany regarding this regime:
- The distance sales threshold is €100,000. Where the total amounts of sales to German customers in any 12 months period exceeds this threshold, a registration is required
- Foreign companies may opt to register in Germany before the threshold is exceeded (the business must remain registered for at least 2 years). German companies may opt to register abroad if the threshold not exceeded, this option is also mandatory for 2 years once the application is sent, and the German authorities must be informed in writing about the use of the voluntary registration in the country of arrival
- When a foreign e-commerce business registers in Germany, a compliant VAT invoice must be issued for each German client. It is not allowed to issue a "simplified invoice"
- Intrastat returns are due when the Intrastat threshold is exceeded.
- VAT returns must report the sales as domestic sales only. Distance sales are not reported as intra-Community acquisitions followed by local sales
- If goods are returned by the client, an intra-Community supply is not reported in Germany
- An ESL return is never due on distance sales
German Annual VAT returns
Annual summary returns are filed in addition to the periodic VAT returns submitted during the year. These returns summarize the data reported in the four quarters (or 12 months) of the previous calendar year.
The annual summary returns in Germany are considered as the final VAT return. Periodic VAT returns, whether they are monthly or quarterly, are often referred as "preliminary VAT returns" because the data reported is only considered final once the Annual return is submitted. This is the reason why some corrections can be made directly through the German annual summary VAT return.
Frequency of filing and due date
The annual summary VAT returns is filed for a complete calendar year. The due date to submit the German annual VAT return is 31 July of the following year. In case this return is filed by a recognised tax consultant, the due date is shifted to 28 February of the second following year. These deadlines have been updated in December 2016 by the German tax authorities.
In case a payment needs to be made following the submission of the annual return (e.g. Additional output VAT reported in the annual return), this payment must be made within one month following the submission of the return.
In case the due date falls on a Saturday, Sunday or bank holiday, the date is shifted to the next working day.
Nil Annual summary VAT return
If there are no transactions to be reported in a given year, a nil Annual summary VAT return must be submitted in Germany.
Corrective German Annual VAT return
Once the annual return has been submitted for a calendar year, any subsequent correction of transactions reported in that year can only be made through a corrective annual return. Periodic VAT returns cannot be corrected once the annual VAT return has been submitted.
The corrective annual VAT return in Germany replaces the previously submitted return. It is not a supplementary declaration but a completely new return where all data has to be reported again. The return is corrected using the same form and way of filing as the annual return. In this form, box 110 must be completed with code 1.
Penalties on German Annual VAT returns
Where these annual VAT returns are submitted late, an automatic penalty of 0.25% of the VAT due will apply. The VAT due is reduced by the amount paid throughout the year, therefore, penalties will apply on the remaining payment following the monthly or quarterly returns submitted and paid during the year.
Late filing of the German annual VAT return can be subject to a penalty of up to 10% of the reported VAT amount with a limit of €25,000. In practice, the authorities may not always apply this penalty.
If the annual return requires an additional payment, missing this payment will also trigger a late payment penalty of 0.25% of the VAT due per month. Monthly interest will be added to this amount after 16 months from the end of the year in which VAT became due.
German tax authorities contact
In Germany, the competent tax office of a foreign non-established company depends on the country of establishment. For established entities or businesses incorporated in Germany, the competent office depends on the official address.
Find under this link details about each tax office in Germany.
Please contact us if you want to receive the list of competent tax authorities for each jurisdiction.