Do I need a VAT number to sell in Germany?

Who needs a VAT registration number?

Who needs a VAT number? Businesses involved in economic activities within the European Union (EU) or engaging in intra-European trade typically need a VAT number. Non-EU businesses selling goods or services in the EU may also require one.

What are the VAT rules in Germany?

Summary. VAT in Germany applies to nearly all goods and services supplied for payment. The standard rate is 19%, with a reduced rate of 7% for essentials like food and books. Businesses earning over €25,000 must charge VAT and submit advance returns through the ELSTER portal.

Do I need to charge VAT if self-employed?

Yes. If you're a sole trader who is either already VAT-registered or will exceed the VAT threshold, you'll need to charge VAT on your labour time in addition to the cost of goods. Labour is part of your service and therefore, VAT should be calculated and added to it as part of your invoice.

Who pays 42% tax in Germany?

The tax percentage varies depending on income and the type of tax being considered. For 2024, the tax brackets for income tax are: income up to €11,604 per annum = 0% (no tax) €11,605 to €66,760 = 14% to 42% (progressive rate)

How much tax do I pay in Germany as a freelancer?

Taxation in Germany depends on income. You will pay about 14% to 45% of your earnings on income tax, with the rate depending on your earnings: Up to €9,744 per year: exempt. €9,745 – €57,918 per year: 14% to 42%

What happens if I don't register for VAT?

If you miss the deadline for submitting your return HMRC will record a 'default' on your account. Once you've defaulted, you'll begin a 12 month 'surcharge period'. A surcharge is an extra amount on top of the VAT you owe.

How do I know if I need a VAT number?

Who needs a VAT number?

• carries out the supply of goods or services taxed with VAT;
• makes an intra-EU acquisition of goods;
• receives services for which it is liable to pay VAT (Article 196, VAT Directive);
• supplies services for which the customer is liable to pay VAT (Article 196, VAT Directive).

What do I put if I don't have a VAT number?

Depending on your location, you may be requested to provide your VAT registration number under your Billing information; it is a required field. If your company does not yet have a VAT number, you could circumvent this requirement by adding a dash "-" in the VAT field.

Do sellers have to pay VAT?

Is VAT paid by the seller or buyer? A seller collects VAT from sales and reports it to the local tax authority on behalf of the buyer. A buyer may also end up charging VAT if it is selling its own goods or services.

What if my client is not VAT registered?

When you issue invoices, it does not matter if your customer is not VAT registered. You must still collect the VAT and pay it to HMRC. Your unregistered customers will have to pay the full amount including VAT, but they will not be able to reclaim the VAT from HMRC.

What is the 36 month rule?

How Does the 36-Month Rule Work? If you lived in a property as your main home at any time, the last 36 months before selling it are usually free from Capital Gains Tax (CGT). This applies even if you moved out before the sale. The rule is helpful if selling takes longer due to personal or market reasons.

Is 70,000 euros a good salary in Germany?

A good salary in Germany depends on your field, experience, and lifestyle aspirations. Generally, a salary between €64,000 and €70,000 gross annually is considered very good. This translates to a net salary of around €40,000 to €43,000 per year, offering a comfortable standard of living in most German cities (source).

Is 3000 euro a good salary in Germany?

Yes, €3,000 is generally a decent salary in Germany, especially as net income (after tax) for a single person, allowing for a comfortable life outside of extremely expensive cities like Munich, but it's tight for families or in major hubs, while €3,000 gross (before tax) is lower and means less disposable income. The key factors are whether it's brutto (gross) or netto (net), your city, and if you're single or have dependents. 

What is a freelance tax code in Germany?

A Steuernummer is your German freelance tax number. Steuernummer is assigned to self-employed people in Germany. Every self-employed person will have a Steuer-ID AND a Steuernummer. A German freelance tax number comes in a XX/XXX/XXXXX format.

Do I have to pay VAT if I'm not a business?

VAT is a tax collected on behalf of HMRC. It never belongs to you. VAT registered businesses add VAT to their sales invoices and can reclaim any VAT included in the items they have bought. If you are not VAT registered you still have to pay the VAT on your purchases but are unable to reclaim it.

What is the minimum self-employed earning without paying tax?

If you have net earnings of $400 or more from self-employment, you must file a tax return. This applies regardless of your age or filing status. Net earnings are calculated by subtracting your business expenses from your gross business income.

How much can I earn before I have to be VAT registered?

The VAT registration threshold in the UK is currently set at £90,000, effective from April 1, 2024. Businesses must register for VAT if their taxable turnover exceeds this amount in the past 12 months or if they expect to exceed it within the next 30 days.

What is the 183 day rule in Germany?

According to this rule, if an individual spends more than 183 days in a calendar year in Germany, they may be considered a tax resident and subject to German taxation on their worldwide income. Period Calculation: The 183 days can be cumulative and do not need to be consecutive.

How often do I need to file 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 €9,000. If payable VAT is below this amount, VAT returns are normally filed on a quarterly basis.

Do I have to charge VAT on everything?

Not all sales are liable to VAT. Some traders are not registered for VAT because their businesses have sales (turnover) below the VAT registration threshold and so they cannot charge VAT on their sales (unless they decide to register voluntarily – see the heading below: Voluntary registration).