A company established in the European Union may recover its VAT in Germany as long as it does not conduct any taxable operations in the country.VAT is then deductible from its business expenses and the company can recover a certain amount of costs incurred during a commercial service.
We have prepared this article to assist you in handling your administrative procedures, summarising the salient points of the VAT refund process in Germany.
Naturally, this topic relates to companies established in the European Union. If this is not your situation, you must first check whether there is a bilateral agreement between Germany and the country of your company headquarters. You can contact us to find out more about this topic or go to the page dedicated to VAT refunds for countries outside the European Union.
RULES FOR RECOVERING GERMAN VAT
First of all, you must identify which expenses are deductible and which are not deductible. Below is a summary table; note, however, that this list is not exhaustive and that certain categories have specific provisos.
|Hotel and accomodation||YES|
|Conferences and seminars||YES|
|Goods transport||YES if VAT is charged|
Deadline for submission: Your request must be made by 30th September of the year following your commercial activity in Germany.
This can be done using the electronic form available on the portal of your tax authority which will handle its transmission. Be aware that your dossier can be submitted quarterly or annually. However, you must ensure that your refund request duly respects the minimum thresholds: 400 euros for a quarterly request, 50 euros for an annual request. For any request, you will of course be required to supply the necessary documents for its consideration: detailed invoices showing the German VAT number of the suppliers and the amount of VAT and/or import documents. You can attach them directly to your electronic dossier on the platform (maximum file size is 5 Mb).
ANALYSIS OF YOUR GERMAN VAT REFUND REQUEST
The member State then has 4 months to process your complete file with effect from the date of receipt. During this period, the applicant may be contacted by the German tax authority to present additional documentation. This validation period may last up to 6 months depending on the information supplied in the dossier; once the request is approved, payment is made within 10 days.
You can consult the specific VAT refund rules in Germany in greater detail in the document made available online by the European Commission.
Be aware that these formalities can be fully handled by a tax agent or representative, in order to facilitate your activities in the country and comply with the current legislation.
This solution is often used when the amounts of deductible VAT are large or when the categories of expenses require in-depth analysis.
ASD is a tax firm specialising in VAT recovery. For more information on our services please visit our dedicated page or contact us via our contact form. We shall be delighted to assist you in handling your procedures and managing your refund requests. Be aware that we can recover your VAT, not only in Germany, but also in the 27 other member States of the European Union.