Germany VAT Compliance Guide
Germany applies a standard VAT (Umsatzsteuer) rate of 19% (reduced 7%) under the Umsatzsteuergesetz (UStG). The small-business scheme (Kleinunternehmerregelung) applies below €22,000 annual turnover. From 1 January 2025, B2B invoices in Germany must be issued as structured electronic invoices (e-invoices) under the Growth Opportunities Act (Wachstumschancengesetz), with mandatory receipt and a phased path to mandatory transmission.
German VAT compliance changed materially on 1 January 2025: B2B invoices issued to German customers must now be structured electronic invoices conforming to EN 16931, and recipients must accept them. This is the start of a phased e-invoicing mandate — voluntary transmission in 2025/2026, then mandatory transmission via a state platform (likely by 2027/2028). The rates themselves are simple: 19% standard, 7% reduced. The small-business scheme under §19 UStG exempts businesses under €22,000 from VAT registration and charging, but opting out of the scheme to recover input VAT is a strategic decision.
VAT Rates
| Rate | Applies To |
|---|---|
| 19% | Standard rate — most goods and services |
| 7% | Reduced rate — food, books (including e-books), agricultural inputs, certain cultural services, local public transport |
| 0% | Intra-community supplies, exports, cross-border services to EU businesses under reverse charge |
Registration Thresholds
| Scheme | Threshold |
|---|---|
| Kleinunternehmerregelung (small-business scheme) | €22,000 turnover in the current calendar year (and €50,000 in the previous year for new businesses) |
| Compulsory registration | Above €22,000 — or voluntarily opt out of the scheme to charge VAT and recover input VAT |
| Distance sales / cross-border services (EU) | €10,000 combined annual threshold across all EU Member States |
Filing Requirements
Umsatzsteuer-Voranmeldung (advance VAT return)
Monthly for turnover > €7,500, quarterly for €1,001–€7,500, semi-annually (initial period) for ≤ €1,000. Filed electronically via ELSTER by the 10th of the following month.
Umsatzsteuer-Jahreserklärung (annual VAT return)
Annual reconciliation filed via ELSTER. Due by 31 July of the following year (or 28 February with a tax advisor extension).
Zusammenfassende Meldung (ZM) / VIES
Summary report of intra-EU B2B supplies, filed monthly or quarterly via ELSTER. Required for any business making intra-community supplies.
E-Invoicing Status
From 1 January 2025, under the Growth Opportunities Act (Wachstumschancengesetz), B2B invoices in Germany must be structured electronic invoices conforming to EN 16931 (e.g., XRechnung, ZUGFeRD). Recipients must accept them. Senders can voluntarily transmit via a state platform in 2025–2026; mandatory transmission is phased in from 2027 (turnover > €800,000) and 2028 (all others). This is the German continuous transaction control (CTC) trajectory.
Key Deadlines
Advance return: 10th of the month following the period. Annual return: 31 July (28 Feb with advisor). ZM: monthly or quarterly.
How Nika Helps
Nika captures every supplier invoice with the correct VAT rate (19% / 7%) and supplier VAT number, and files the original PDF the day it arrives, from {price} per processed invoice. That gives the accountant complete, structured records for the ELSTER advance return and annual return — and the underlying data for e-invoice compliance. Nika does not transmit to ELSTER or issue e-invoices itself.
What changed for German B2B invoicing in January 2025?
B2B invoices to German customers must now be structured electronic invoices (EN 16931) such as XRechnung or ZUGFeRD. Recipients must accept them. Mandatory transmission via a state platform phases in from 2027–2028.
Should I use the Kleinunternehmer scheme?
It exempts you from charging VAT below €22,000 turnover, but you also cannot recover input VAT. If your customers are VAT-registered businesses (who can recover the VAT you charge), opting out is usually advantageous. Consult a Steuerberater.