FAQs on the registration process for VAT in Germany

The Value Added Tax, shortly known for VAT, is a form of consumption tax that exists in all European Union countries. Although in each of these countries it goes under different names, the concept is the same and it is also worth mentioning that each country opts for its own VAT rate. Those who want to register for VAT in Germany and want to know more about this aspect should definitely read the rest of the article below which contains some of the most frequently asked questions about this matter.

How is this tax collected and why is important to register for it?

Many people who come from countries outside the EU are wondering why there is such a value added tax, why they should register for it and when they do, how it is collected. First things first, it is important to note that you are legally required to register for VAT and if you don’t, the tax authority may be forced to fine you and, worst case scenario, stop your services or goods from getting to customers you were targeting. The seller is supposed to charge the consumer VAT and pay this tax to the government afterwards.

How long does it take to get a VAT registration number?

The most important thing you have to take care of before even applying for the VAT registration number is to ensure that you have all the necessary papers and that there is nothing that could make you wait longer for that number. After you have submitted the papers, you will receive the VAT registration number within six weeks at most.

How much does it cost?

Worth mentioning is the fact that prices for this registration process vary a lot in Germany and some of the aspects that make the difference in price in this situation are the scope of the business and the type of your business. It is best to ask for some professional advice in such case in order to understand how much you would have to pay if you open a business in Germany.

What happens next after registration?

Once you receive your VAT registration number, expect Value Added Tax data requirements every once in a while, because these are important for fulfilling the tax authority criteria. You should know that there are professionals who can help you with collecting and combining the necessary data and then submitting it to the tax office on your behalf translated into German language, so you should definitely look for these specialists if you need professional help with this. In case you do not send the data in time, there are high chances for the tax authority to issue fines or penalties and you may have to pay even more money than the VAT you owe. Submit the Value Added Tax advance returns each month for the first two years after opening your business and the Value Added Tax return each year.

Overall, these are some of the most frequently asked questions regarding registration for VAT in Germany.