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VAT & Permanent Establishment in Germany

When having a permanent establishment according to a German double taxation agreement in Germany, usually also a VAT registration obligation arises. Therefore the company has to get VAT registered, has to file monthly preliminary VAT returns and an annual VAT return as well as EC sales list and INTRASTAT if required.

For permanent establishments the same accounting rules in Germany are applying as for German companies and the accounting has to be done on a monthly basis. Furthermore the invoices have to be issued under the German VAT law conditions and issued with German VAT. 

When selling or providing only nontaxable sales in Germany (e.g. service is taxable in other EU country were the recipient is located) there can be exemptions from VAT which have to be reviewed case by case.

Summary of the most important details

  • Permanent establishment in Germany needs also a German VAT registration.
  • VAT returns, EC sales list and INTRASTAT has to be filed. 
  • Invoices have to be issued according to German VAT law.
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