This guide decodes the complexities of the system to guarantee your peace of mind. Whether you are an expat or a business owner, don’t let the bureaucracy hold you back. Follow our clear breakdown of the legal and fiscal procedures for VAT & Quarterly Filings and keep your business moving forward.
Unlike employees, most self-employed individuals and businesses in Germany must act as tax collectors for the state. You are required to submit an Advance VAT Return (Umsatzsteuervoranmeldung) electronically to the Finanzamt, typically on a monthly or quarterly basis. This report declares the VAT you have collected from clients and calculates the VAT you have paid on business expenses. The difference must be paid (or refunded) by the 10th of the following month.
The challenge isn’t just math; it’s bureaucracy and timing. Late submissions trigger automatic surcharges (Säumniszuschläge), and incorrect invoices can lead to the denial of tax deductions years later during an audit. At Agroup Consulting, we move beyond simple data entry. We review your outgoing invoices to ensure they meet all legal criteria and audit your incoming receipts to guarantee you can reclaim the VAT (Vorsteuer) paid on laptops, coworking spaces, and travel. We handle the digital transmission via ELSTER, ensuring you never miss a deadline.
For expats working with clients outside of Germany, VAT becomes significantly more complex.
Many expats start under the “Small Business Regulation,” which exempts them from VAT if revenue is under €22,000. However, exceeding this limit without realizing it is a common disaster that forces you to repay VAT retroactively. We monitor your revenue thresholds proactively, advising you exactly when to switch to standard taxation to avoid crippling back-payments.
We aim to make your accounting paperless and painless:
Navigating German bureaucracy requires precision. We start by analyzing your specific situation to define the most effective legal and fiscal strategy for your case.
Once your strategy is set, we guide you through the paperwork. We identify exactly which documents are needed and prepare everything on your behalf to ensure a flawless application.
We handle the final submission to the local tax office (Finanzamt). We manage all communication to ensure full compliance and secure the fastest possible result for you.
At Agroup Consulting, we work with certified German tax advisors (Steuerberater) specializing in international taxation. With over 15 years of experience, a proven track record of results, and the trust of more than 500 expats in Germany, our firm delivers trusted services that help you navigate the complex German fiscal system with complete confidence.
It depends on your revenue and your chosen tax status. Germany offers a specific exemption for small businesses, but choosing it isn’t always the best financial decision. You generally fall into one of two categories:
Small Business Rule (Kleinunternehmerregelung): If your revenue is under €22,000 in the previous year and under €50,000 in the current year, you are exempt from charging VAT. However, this means you cannot refund the VAT you pay on your own business expenses (like laptops or coworking fees).
Standard Taxation (Regelbesteuerung): You charge 19% (or 7%) VAT to your clients and submit monthly or quarterly Advance Returns (Umsatzsteuer-Voranmeldung). The advantage is that you can claim back all the Input Tax (Vorsteuer) you paid on purchases, effectively lowering your business costs by 19%.
This is the most common pitfall for digital nomads. Just because you live in Germany doesn’t mean you add 19% German VAT to every invoice. If your client is a business in another EU country or located outside the EU (e.g., USA, UK, Canada), the invoice is typically issued without German VAT under the “Reverse Charge” mechanism or as a non-taxable export service.
The Reporting Trap: Even though these invoices show “0% VAT,” you are strictly required to report this revenue in your periodic VAT filings. For EU clients, you must also file a “Recapitulative Statement” (Zusammenfassende Meldung). Failing to report foreign income in your VAT return is a major red flag for the Finanzamt. We ensure your international invoices are coded correctly to prevent audits.
USA
Canada
United Kingdom
No. If your annual revenue is under €22,000, you can choose the Small Business Rule (Kleinunternehmer) to be exempt. However, you cannot claim refunds on your own business expenses.
Generally, without VAT. Services for clients outside Germany (e.g., USA, UK) are usually invoiced at 0% VAT using the “Reverse Charge” mechanism, but must still be reported.
Strictly by the 10th. You must submit your advance return (Voranmeldung) by the 10th of the following month or quarter. Late submissions trigger automatic penalties.
Yes. If you opt for standard taxation, you can reclaim the 19% VAT paid on business purchases (like laptops or software) as Input Tax (Vorsteuer).
