The German VAT Calculator helps you quickly determine the VAT amount on a purchase or service. You can calculate VAT by adding it to a net amount or removing it from a total amount.
German VAT Calculator
Calculate Value Added Tax (Mehrwertsteuer) for German transactions
Standard Rate
Reduced Rate
Zero Rate
Total Amount
VAT Amount
Net Amount
VAT Rate
Removing VAT: Net = Amount ÷ (1 + VAT Rate)
The German VAT Calculator helps you quickly determine the VAT amount on a purchase or service. You can calculate VAT by adding it to a net amount or removing it from a total amount.
When adding VAT:
- VAT Amount = Net Amount × VAT Rate
- Total Amount = Net Amount + VAT Amount
When removing VAT:
- Net Amount = Total Amount ÷ (1 + VAT Rate)
- VAT Amount = Total Amount – Net Amount
In Germany, the standard VAT rate is 19%, with a reduced rate of 7% for certain goods and services. Some items are zero-rated or exempt from VAT.
Adding Standard VAT Example
Let’s say you want to calculate VAT on a €100 product with the standard VAT rate of 19%:
Net Amount = €100
VAT Rate = 19% or 0.19
Calculate the VAT amount:
VAT Amount = €100 × 0.19 = €19
Calculate the total amount:
Total Amount = €100 + €19 = €119
Adding Reduced VAT Example
Now, let’s calculate VAT on a €100 book with the reduced VAT rate of 7%:
Net Amount = €100
VAT Rate = 7% or 0.07
Calculate the VAT amount:
VAT Amount = €100 × 0.07 = €7
Calculate the total amount:
Total Amount = €100 + €7 = €107
Removing VAT Example
Let’s say you have a total amount of €119 and want to calculate the net amount and VAT:
Total Amount = €119
VAT Rate = 19% or 0.19
Calculate the net amount:
Net Amount = €119 ÷ (1 + 0.19) = €119 ÷ 1.19 = €100
Calculate the VAT amount:
VAT Amount = €119 – €100 = €19
German VAT System
Germany has a Value Added Tax (Mehrwertsteuer) system with different rates depending on the type of goods or services:
- Standard Rate (19%): Applies to most goods and services, including electronics, clothing, restaurant services, and most professional services.
- Reduced Rate (7%): Applies to certain goods and services such as food, books, newspapers, public transport, hotel accommodation, and cultural events.
- Zero Rate (0%): Applies to exports, intra-community supplies, and certain international transport services.
- Exempt: Some services are exempt from VAT, such as healthcare, education, financial services, and insurance.
VAT Rates by Category
Standard Rate
Reduced Rate
Zero Rate
VAT Registration in Germany
In Germany, VAT is administered by the Federal Central Tax Office (Bundeszentralamt für Steuern). Businesses must register for VAT if their taxable supplies exceed €17,500 in the previous year and are expected to exceed €50,000 in the current year.
Once registered, businesses must:
- Charge VAT on taxable supplies at the appropriate rate
- Submit VAT returns, usually monthly, quarterly, or annually
- Keep proper records of all transactions for at least 10 years
- Issue tax invoices for supplies
- Remit any VAT collected to the tax authorities
Small businesses with taxable supplies below the threshold may be eligible for the small business regulation (Kleinunternehmerregelung) and do not need to charge VAT.
VAT Compliance and Penalties
VAT compliance is essential for businesses in Germany. The tax authorities impose penalties for various non-compliance issues:
- Late Registration: Penalty of up to €10,000 or 10% of the tax that should have been collected
- Late Filing: Penalty of up to 10% of the VAT due, with a minimum of €25 and a maximum of €25,000
- Late Payment: Late payment interest of 1% per month on the outstanding amount
- Incorrect Returns: Penalty of up to €10,000 for deliberate or negligent incorrect information
Businesses can reduce penalties by voluntary disclosure of errors before the tax authorities detect them. It’s important to maintain accurate records and seek professional advice when needed.
Understanding German VAT
What is VAT?
Value Added Tax (VAT) or Mehrwertsteuer is a consumption tax levied on the value added to goods and services at each stage of production or distribution. It was introduced in Germany in 1968 and is administered by the Federal Central Tax Office. VAT is an indirect tax, meaning it is collected by businesses on behalf of the government.
VAT History in Germany
Germany introduced VAT in 1968, replacing the previous turnover tax. The standard rate has changed over time: it was 10% from 1968-1978, increased to 11% in 1978, to 12% in 1979, to 13% in 1981, to 14% in 1993, and to 16% in 1998. The current standard rate of 19% was introduced in 2007. The reduced rate has been 7% since 1983.
VAT Rates
Germany has three main VAT rates: standard (19%), reduced (7%), and zero (0%). The standard rate applies to most goods and services. The reduced rate applies to specific items like food, books, public transport, and hotel accommodation. The zero rate applies to exports and certain international services. Some services are exempt from VAT, meaning no VAT is charged but input tax cannot be claimed.
Tax Invoices
Registered businesses must issue tax invoices for their supplies. A valid tax invoice must include: the words “Rechnung” (invoice), seller’s name and address, VAT identification number, customer’s name and address, issue date, invoice number, description of goods/services, quantity, price per unit, total amount, VAT rate, and VAT amount. Invoices must be issued within 6 months of the supply.
VAT Returns
Registered businesses must file VAT returns with the tax authorities. The filing frequency depends on annual VAT liability: monthly filers (more than €7,500), quarterly filers (€1,001 to €7,500), and annual filers (€1,000 or less). Businesses can apply for permanent quarterly filing if their VAT liability is not expected to exceed €7,500 in the current calendar year.
VAT Schemes
Germany offers several VAT schemes to simplify compliance for smaller businesses. The small business regulation (Kleinunternehmerregelung) exempts businesses below certain thresholds from charging VAT. The cash accounting scheme allows businesses to account for VAT when payment is received rather than when the invoice is issued. The flat-rate scheme (Differenzbesteuerung) is available for second-hand goods.
German VAT Information for Businesses
VAT Registration Process
Businesses can register for VAT by submitting a tax registration form (Fragebogen zur steuerlichen Erfassung) to the local tax office (Finanzamt). Required information includes business name, legal form, activities, expected revenue, and banking information. Once registered, businesses receive a tax number (Steuernummer) and a VAT identification number (Umsatzsteuer-Identifikationsnummer) for intra-community transactions.
VAT Accounting
Proper VAT accounting is essential for compliance. Businesses must maintain accurate records of all sales and purchases, tax invoices issued and received, and any adjustments or corrections. Most businesses use accounting software to track VAT transactions and generate reports. Records must be kept for at least 10 years and be available for tax authorities inspection upon request.
International VAT
Special VAT rules apply to international transactions. Goods exported from Germany are zero-rated, while imports are subject to VAT. For intra-community supplies within the EU, businesses need a valid VAT identification number and must apply the reverse charge mechanism. Services to customers outside the EU may also be zero-rated if certain criteria are met.
Input Tax Deduction
Businesses can deduct input tax (Vorsteuer) for the VAT paid on their business purchases. This includes goods, services, and some capital items. There are restrictions on deducting input tax for certain expenses, such as representation expenses, passenger vehicles, and goods used for both business and personal use. Input tax must be claimed within 1 year of the invoice date.
VAT Audits
The German tax authorities conduct VAT audits to ensure compliance. These may be triggered by risk assessment, random selection, or specific concerns. During an audit, the tax authorities will examine records, invoices, and financial statements. Businesses should prepare by maintaining accurate records, reconciling VAT accounts regularly, and addressing any discrepancies promptly.
VAT Planning
Effective VAT planning can help businesses minimize their tax burden legally. This includes proper timing of purchases and sales, understanding zero-rating opportunities, structuring transactions efficiently, and taking advantage of available reliefs and exemptions. Businesses should also consider the cash flow implications of VAT and plan accordingly.