General EU businesses (8th Directive)
German VAT is known as “Umsatzsteuer” (USt) or “Mehrwertsteuer” (MwSt).
A foreign taxable person is entitled to recover German VAT if the following conditions are satisfied:
- The business is not registered or liable to be registered for VAT in Germany;
- The business does not have residence, its seat or a fixed establishment in Germany;
- The business has not rendered any taxable supplies/services in Germany,
- Certain tax-exempt cross-border transportation from/to non-EU countries and ancillary services;
- Supplies/services for which the reverse charge mechanism applies;
- Supplies subject to individual transport assessment; or
- Electronically provided services where the foreign taxable person opted for application of the special regime for non-established taxable persons supplying electronic services to non-taxable persons;
- Supplies made as intermediary party that are subject to an intra-community triangulation, where the last customer is obliged to pay the tax that becomes payable on the delivery to the last customer.
VAT cannot be recovered on:
- Supplies of goods and services that are not used for business purposes, including gifts; or
- Supplies of services acquired or goods imported connected to certain exempt activities.
If the application relates to a period of less than one calendar year but not less than three months, the amount for which application is made may not be less than EUR 400; if the application relates to a period of a calendar year or the remainder of a calendar year, the amount may not be less than EUR 50.
The application must cover a period of not less than three consecutive calendar months (e.g. from 1 January to 31 March) in one calendar year and not more than one calendar year, unless the period represents the remainder of a calendar year (e.g. from 1 November to 31 December).
The application can relate to invoices or import documents not covered by previous applications in respect of transactions carried out during that calendar year. Only one refund claim may be submitted for the remainder of a calendar year. However, if the claim for the remainder of the calendar year has not been finally processed/assessed, the refund claim may be extended.
Want to know more?
Contact our advisers and find out more about reclaiming your VAT/tax.