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VAT Solutions

Retroactive VAT registrations

Foreign companies sometimes do business, such as selling goods or services in Germany, that may require VAT registration with the German tax authorities.

A VAT registration should be done prior to the business activity in Germany if possible. However, in some cases the company realizes it later or is contacted by the German tax authorities. Then a VAT registration must be done retroactively.

VAT registration means that the non-German company is required to:

  • Register for VAT in Germany, where the business activity takes place.
  • Assess (charge) VAT on all or some of the invoices issued to the customer.
  • Deduct most of the VAT incurred from German vendors.

What will happen, if an obliged company doesn't register for VAT in Germany?

If a company does not register when required, the VAT incurred from the German vendors is not refundable. Furthermore it is very likely that the German tax authorities will start the execution process. Inside the EU, German tax authorities can execute German tax liabilities also in other EU countries according to the EU execution directive. For companies from outside the EU it is also possible that the German tax authorities will execute against the companies by doing business in Germany next time.

Examples for VAT registration cases

Examples of business activities that may require VAT registration in Germany are:

  • Conferences and tradeshows
  • Importing of goods by the foreign company and selling it in Germany
  • Drop-shipping of goods
  • Installations and maintenance services

WW+KN helps you to handle a retroactive VAT registration in Germany

The experts at WW+KN can answer questions regarding national and international VAT law. They will explain the handling of individual transactions and show you the optimum structure for your sales.

Furthermore WW+KN can assist you by handling a retroactive VAT registration with all its challenges like doing adjustments of invoices, communication by customers and suppliers, communication with the German tax authorities and trying to avoid penalties and high interests charged by the German tax authorities.