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VAT Compliance

VAT returns

Every VAT registered company in Germany, resident or non-resident VAT trader, must report taxable transactions and reverse charge invoices through periodic preliminary VAT returns. 

Normally monthly preliminary VAT returns must be issued, but depending of the annual VAT payments also quaterly or annual VAT returns can be allowed by the tax authorities. If a company issues monthly or quarterly preliminary VAT returns, also an annual - final - VAT return for the calendar year must be issued.

In addition to declaring German sales, services and output VAT in the VAT return, companies can offset this by declaring German import, input or purchase VAT.

Permanent extension in time possible

Any German monthly or quarterly VAT returns must be filled due on the 10th of the month following the period ends. It is possible to apply for a permanent extension in time (Dauerfristverlängerung), if an advance payment as deposit will be done to the tax authorities. The permanent extension in time allows to issue the required VAT return one month later. The annual German VAT return summarizes all transactions of the calendar year and is due by 31st May of the following year. Any German VAT due must be paid at the same time.

High delay agios and penalties in case of late fillings

If there are false declarations or late fillings of VAT returns in Germany, the tax authorities can charge high penalties. Late fillings can lead in penalties with 10 % of the VAT due till a limit of 25,000 EUR (Verspätungszuschlag). In case of delayed VAT payments, the tax authorities charge penalties of 1 % of the VAT due per month overdue (Säumniszuschlag).

Assistance by WW+KN in order to prepare correct VAT Returns

WW+KN can act for foreign companies as German VAT representative and prepare the German VAT returns for the clients from abroad. The advantages for foreign clients are that WW+KN reviews all incoming and outgoing invoices according to the German formal law and handles the correspondence with the German tax authorities.

Summary of the most important points

  • Depending on the annual VAT amount, a company is obliged to file monthly, quarterly or annual VAT returns.
  • In case of monthly and quarterly VAT returns also and additional annual VAT return is required.
  • The German tax authorities have very strict deadlines. In case of late filling or late payment very high penalties can arise.