VAT Registration in Germany is a crucial step for any non-resident business seeking to access the German market. With Germany being one of Europe’s largest economies and a major hub for cross-border trade, understanding the requirements for VAT registration is essential to avoid penalties, customs delays, and blocked marketplace sales.

This guide provides a clear, step-by-step overview of when and how to register for VAT in Germany.

Why Non-Resident Firms Must Register for VAT in Germany

Failing to complete VAT Registration in Germany exposes non-resident businesses to severe penalties, blocked marketplace sales, and customs holds on imported goods.

German tax authorities enforce strict compliance, and marketplaces often require proof of VAT registration before allowing sales or inventory storage. Using a trusted partner like Commenda can help foreign companies manage these requirements and ensure smooth market entry.

 When Does a Foreign Business Need to Register? Key Triggers

Certain activities and conditions trigger the need for foreign businesses to register for VAT in Germany. Below are the most common scenarios that require non-resident businesses to complete VAT registration:

  • Holding inventory or using a local warehouse: If you store goods in Germany, you must register for German VAT before the goods arrive.
  • Remote sales to German consumers (B2C): Selling goods or digital services directly to private individuals in Germany, even without a physical presence, requires VAT registration.
  • Importing goods into Germany for local sale: If you import goods into Germany and sell them locally, VAT registration is mandatory from the first transaction.
  • Marketplace facilitation: Online marketplaces such as Amazon and eBay often require foreign sellers to provide a German VAT number before listing products or storing inventory in Germany.
  • Trade shows or events: Participating in German trade fairs and making sales or deliveries on-site can also trigger a VAT registration requirement.

Country-specific examples:

  • A US-based e-commerce company using Amazon’s German fulfillment centers must register for VAT before inventory is shipped.
  • A Canadian manufacturer importing machinery into Germany for direct sale must register for VAT upon the first import.

Registration Thresholds & Nexus Tests

There is a nil threshold for VAT Registration for non-resident businesses in Germany. Non-resident businesses must register for German VAT from the very first taxable transaction, regardless of annual turnover.

However, certain activities and conditions can influence registration requirements:

  • Special Digital Services: Businesses offering digital services (e.g., streaming services, online courses, software) to consumers in Germany must register for VAT, even if their turnover is low.  
  • Low-Value Import Rules: For foreign businesses selling low-value goods (under €22) to German consumers, simplified VAT registration procedures may apply.  
  • Distance Sales Threshold: If a foreign business sells goods online to German consumers, the distance sales threshold applies. For 2025, the threshold for distance sales into Germany is €10,000. If a foreign business exceeds this threshold, it must register for VAT in Germany.

Germany VAT Number Format Explained

A German VAT number is issued by the Bundeszentralamt für Steuern (Federal Central Tax Office) and consists of the following elements:

  • Country Code: “DE” (for Germany).
  • Nine Digits: The unique identification number assigned to each business. It typically includes both numeric and alphanumeric characters.

Example of a valid German VAT number:

  • DE123456789

Where DE: Represents Germany’s country code, and 123456789 is the unique identification number assigned to the business.

Common Errors to Watch Out For:

  • Missing digits or misplaced characters.
  • Typographical errors in the digits or letters.
  • Incorrect country prefix (e.g., using “IT” instead of “DE”).

Is a Local Tax Agent or Fiscal Representative Required?

Foreign businesses wishing to register for VAT in Germany may need to appoint a fiscal representative depending on their specific circumstances. A fiscal representative is a local tax agent who acts on behalf of a non-resident business to manage VAT obligations in Germany.

In general, non-resident businesses that do not have a permanent establishment in Germany must appoint a fiscal representative. This representative will be responsible for ensuring that the business meets its VAT obligations, including filing returns and making payments.

However, businesses with a permanent establishment in Germany may not need to appoint a fiscal representative.

Special Schemes & Simplifications

The German VAT registration guide offers several schemes and simplifications to help foreign businesses reduce the administrative burden and stay compliant with tax regulations. Here are the main options available:

  1. Import-VAT Deferment: This scheme allows businesses to defer VAT payments on imports until they file their VAT return, improving cash flow and reducing upfront costs.  
  2. Simplified E-Services Scheme (OSS):
    For businesses providing digital services (such as e-books, software, or online courses), the One Stop Shop (OSS) allows them to pay a single VAT rate for all EU sales.  
  3. Small-Business Exemption:
    Foreign businesses with low turnover in Germany may qualify for the small-business exemption. If a business’s annual turnover is below €22,000 (for 2025), it may be exempt from registering for VAT in Germany, as long as it does not make taxable supplies exceeding €50,000.  

These special schemes and simplifications are designed to make VAT compliance more accessible, especially for small businesses or those involved in specific activities.

Step-by-Step: How to Register for VAT in Germany

VAT registration for Foreign Companies in Germany involves a clear, regulated process overseen by the Federal Central Tax Office (Bundeszentralamt für Steuern, BZSt) and local tax offices.

Here’s how non-resident businesses can obtain a German VAT number:

1. Determine If Registration Is Required

If you’re delivering goods, acquiring goods, using consignment stock, participating in intra-Community transactions, or providing/receiving taxable services in Germany, registration is mandatory.

2. Register Your Business in Germany

  • Before applying for a VAT number, foreign companies must first be registered with the relevant German tax office (Finanzamt) responsible for their country of origin.
  • You can check which tax office is responsible for your country using the BZSt’s official resources.

3. Submit the VAT Registration Application

  • Online: If your business is already registered in Germany but lacks a VAT number, you can use the online application form (available in German).
  • In Writing: If an online application is not possible, send a written application with your company details, the responsible tax office, and German tax number to:
    • Bundeszentralamt für Steuern
    • Dienstsitz Saarlouis
    • 66738 Saarlouis
    • GERMANY

Note: The VAT number will be sent by post only; notification via email or phone is not permitted for legal reasons.

4. Verification and Issuance

  • The BZSt will verify your application with the local tax office. If all information matches, your VAT number (USt-IdNr) will be issued and mailed to your registered address.

5. Post-Registration Compliance

  • After registration, you must file regular VAT returns and comply with German VAT obligations, including proper invoicing and record-keeping.

Required Documents Checklist

When you register for VAT online in Germany, you need to prepare and submit specific documents to the responsible tax office.  

Here is the list of Key Documents Typically Required:

  • Company extract from the commercial register or equivalent proof of incorporation.
  • VAT certificate from the home country (for EU businesses) or other proof of business activity.
  • Articles of Association or similar founding documents.
  • Power of attorney if a tax advisor or representative is handling the registration.
  • Description of planned business activities in Germany.
  • German tax number (if already assigned) and details of the responsible German tax office.
  • Identification documents for the legal representative (such as a passport or national ID).
  • Completed registration form (available only in German).

Authorities may request additional information or clarification, especially regarding the nature of your business activities or the structure of your company. I 

Processing Time & Government Fees

For non-resident tax registration Germany the typical timeframe to receive a German VAT identification number is 4 to 8 weeks after submitting all required documents. However, some cases may take up to 10 to12 weeks.

Delays are common if documents are missing, outdated, or not properly translated into German by a certified translator. The process involves verification by both the local tax office and the Federal Central Tax Office.  

There is no government fee for VAT registration in Germany. However, if you use a tax advisor or fiscal representative, their fees are set privately and not by the tax authorities.

Post-Registration Obligations

After completing VAT Registration in Germany, non-resident businesses face specific and ongoing compliance duties, which include:

  • Monthly VAT Returns (First Two Years): For the first two years after registration, foreign companies are generally required to submit monthly preliminary VAT returns as well as an annual VAT return. These filings must be transmitted electronically to the German tax authorities, and the correspondence is conducted in German.
  • Filing Frequency After Two Years: After the initial two-year period, the frequency of VAT returns may change depending on your annual VAT liability:
    • If the annual VAT payable exceeds €9,000, monthly filings remain mandatory.
    • If VAT liability is between €2,000 and €9,000, quarterly returns are required.
    • If VAT liability is less than €2,000, annual returns may be permitted

Claiming Input-Tax Credits & Refunds as a Non-Resident

Once VAT Registration in Germany is complete, non-resident businesses can reclaim German VAT paid on eligible business expenses directly related to their taxable activities.

Input tax credits are typically claimed through regular VAT returns, where the VAT on purchases is offset against VAT collected on sales. For non-EU companies not established in Germany, a VAT refund can be requested annually under the EU’s 13th Directive by submitting original invoices and proof of business activity to the Federal Central Tax Office (BZSt) by September 30 of the following year. 

Penalties for Late Registration or Non-Compliance

Failure to register for VAT or meet filing deadlines can lead to serious consequences for foreign businesses operating in Germany. The penalties for non-compliance can include:

  1. Late Registration Penalties:
    Late filing of VAT returns can result in a penalty of 10% of the VAT due, capped at €25,000.
  2. Interest on Late Payments:
    If VAT payments are delayed, an extra charge of 1% of the outstanding VAT is applied for each month or part thereof that the payment is overdue.
  3. Import Blockages: Without a valid German VAT registration, imported goods may be held at customs, causing delays and extra costs.
  4. Director Liability: Company directors can be personally liable for unpaid VAT, making timely compliance essential to avoid legal and financial risks.

To avoid these penalties, it is crucial to stay on top of VAT registration requirements, file returns on time, and make payments promptly.

Deregistration & VAT Number Changes

Foreign businesses may need to deregister their VAT number in Germany under the following conditions:

  1. If your business stops trading or has no taxable activities in Germany.
  2. If your taxable turnover falls below the registration threshold.
  3. If the business is transferred to another entity or sold.

Deregistration Process

To deregister, submit a Declaration of Cessation of Activity to the German tax office within 30 days. A final VAT return must also be filed, and any outstanding VAT payments should be cleared.

Changes to VAT Details

If there are changes in your business’s VAT information (e.g., address or activities), these must be reported to the tax authorities within 30 days.

Conclusion

Registering for VAT in Germany is a must for any foreign business selling or storing goods in the country. Since there is no registration threshold for non-resident companies, timely VAT registration and compliance are essential to avoid penalties, customs delays, and blocked sales on marketplaces.

The process requires proper documentation and ongoing filings, which can be complex without local knowledge and expertise. Commenda’s expert team can efficiently handle VAT registration and compliance, allowing you to focus on expanding your presence in Germany.

Book a free demo with Commenda today to ensure seamless compliance in Germany.

FAQs: VAT Registration for Foreign Companies in Germany

Q. Do non-resident businesses need to register for VAT in Germany if they only sell to other VAT-registered businesses?

No, if your business only sells to VAT-registered businesses in Germany (B2B), you may not need to register for VAT.

Q. What happens if a business fails to register for VAT in Germany?

Failing to register can result in penalties, fines, and delays in customs processing. Your marketplace sales may also be blocked.

Q. Is there a VAT registration threshold in Germany for foreign businesses?

No, there is no VAT registration threshold for foreign businesses in Germany.  

Q. Can a business deregister its VAT number in Germany?

Yes, businesses can deregister if they stop operations in Germany, fall below the VAT registration threshold, or transfer the business to another entity. 

Q. How long does it take to get a German VAT number?

The processing time for VAT registration typically takes 4-6 weeks. It may take longer if the application is incomplete or requires additional documentation.

Q. Do I need a fiscal representative to register for VAT in Germany?

Foreign businesses without a permanent establishment in Germany usually need to appoint a fiscal representative. 

Q. Can non-EU businesses claim VAT refunds in Germany?

Yes, non-EU businesses can claim VAT refunds on business-related expenses in Germany by submitting the appropriate VAT refund claim and required documentation.

Q. What are the penalties for late VAT payment in Germany?

The penalty for late VAT payment in Germany is 1% of the VAT due for each month.