When foreign companies enter the German market, indirect taxes quickly become a critical topic. While most businesses are familiar with VAT (Value Added Tax) requirements, Germany also applies a range of excise duties (Verbrauchsteuern) and customs regulations that may affect import, distribution or production activities. Misjudging these rules can lead to compliance issues, delayed shipments, or unexpected costs.
In this article, we outline the key differences between VAT, excise taxes and customs law in Germany – and how our teams at WW+KN, a Baker Tilly Company, support international companies in staying compliant.
VAT in Germany: From Registration to Monthly Filings
For foreign companies, VAT obligations typically begin when they carry out taxable transactions in Germany – without necessarily having a permanent establishment. Common triggers include intra-EU acquisitions, the sale of goods stored in Germany, or the provision of services to non-business customers (B2C).
Our VAT team at WW+KN handles all necessary steps:
- Registration for a German VAT number (Umsatzsteuer-Identifikationsnummer)
- Filing of monthly or quarterly VAT returns (Umsatzsteuervoranmeldungen)
- Submission of EC Sales Lists (Zusammenfassende Meldungen)
- Annual VAT returns (Umsatzsteuerjahreserklärung)
- Input VAT refund procedures for non-established businesses
- Compliance with electronic invoicing and record-keeping obligations
Close contact with the competent tax office (Finanzamt) and precise documentation are key – particularly during the start-up phase.
Excise Duties (Verbrauchsteuern): Sector-Specific Obligations
While VAT applies broadly to most goods and services, excise duties in Germany are levied on specific product categories and regulated separately by the German customs authority (Generalzolldirektion).
The most relevant German excise taxes include:
- Energy Tax (Energiesteuer) – applies to fuels, heating oil, natural gas, and similar products used for energy purposes
- Electricity Tax (Stromsteuer) – levied on electricity consumed in Germany
- Tobacco Tax (Tabaksteuer) – affects cigarettes, cigars, and fine-cut tobacco
- Alcohol Tax (Alkoholsteuer) – covers pure alcohol, spirits and distilled beverages
- Beer Tax (Biersteuer) – applicable to beer produced or imported into Germany
- Sparkling Wine Tax (Schaumweinsteuer) – a historic tax still applicable to sparkling wine and similar beverages
- Coffee Tax (Kaffeesteuer) – imposed on roasted coffee and coffee extracts (often relevant for online retailers and importers; regulated under the Kaffeesteuergesetz)
- Sweetened Beverages (Cotax) – not yet harmonized EU-wide, but under policy discussion for expansion
Unlike VAT, these taxes are not self-assessed through monthly returns but require specific registrations, declarations, and sometimes bonding. For instance, a company importing coffee or alcohol must often register as a tax warehouse operator (Steuerlagerinhaber) or registered consignee (zugelassener Empfänger) and submit monthly excise declarations (Verbrauchsteueranmeldungen) to the customs authority.
Our cooperation with Baker Tilly´s excise tax and customs specialists ensures that such processes are addressed comprehensively, particularly for businesses importing excise goods into Germany for the first time.
Customs and Foreign Trade: When Goods Cross EU Borders
Goods entering Germany from outside the EU are subject to the EU Customs Code, regardless of their final destination. This applies even if the goods are only transiting through Germany. Affected companies must ensure proper customs classification and compliance with various trade rules.
Key aspects include:
- Tariff classification using TARIC codes (Zolltarifnummer)
- Determining the correct customs value (Zollwert) for import declarations
- Using preferential origin documents (e.g. EUR.1, declarations of origin)
- Import clearance via the German ATLAS e-customs system
- Compliance with export control and dual-use regulations under the Foreign Trade and Payments Act (Außenwirtschaftsgesetz) and the EU Dual-Use Regulation
In addition, certain transactions require Intrastat declarations, which are mandatory when the value of goods traded within the EU exceeds specific thresholds.
Companies importing sensitive or regulated products – such as chemicals, high-tech components, or goods subject to sanctions – must also observe licensing and reporting obligations under German and EU law. Our specialized colleagues at Baker Tilly provide detailed advice and operational support in this area, from classification to customs audits.
Integrated Support for Foreign Companies
At WW+KN, our focus is on enabling smooth VAT compliance for foreign companies entering the German market. Whether you are setting up warehousing, participating in trade fairs, selling via platforms or delivering goods from abroad – we ensure that your German VAT obligations are met accurately and efficiently.
At the same time, we cooperate closely with the excise duty, customs and foreign trade specialists at Baker Tilly, allowing us to offer coordinated advice across all relevant fields of indirect taxation. This integrated approach is especially valuable for businesses in the beverage, energy, e-commerce, and logistics sectors – where multiple tax regimes may apply simultaneously.
Contact:
If you require support in VAT registration, excise duties, or customs procedures, please reach out to us at info@vat-germany.com
