German VAT (Umsatzsteuer) Rules for EU and Non-EU Online Sellers: What You Must Know

Germany is one of the largest e-commerce markets in Europe, making it an attractive destination for both EU and non-EU sellers. However, with great opportunity comes a complex tax landscape. Understanding German VAT (Umsatzsteuer) is essential if you plan to sell to German customers—whether you're based in Berlin, Barcelona, or Bangkok. Here’s a comprehensive guide to help you stay compliant and avoid costly surprises.

1. VAT Registration: Who Needs It?

You may be required to register for German VAT if:

• You store goods in Germany for sale to customers (e.g., via fulfillment centers like Amazon FBA).
• You exceed the distance selling threshold (now replaced by the OSS scheme within the EU).
• You are a non-EU seller shipping goods into Germany directly to consumers.

EU sellers can now use the One-Stop Shop (OSS) to simplify VAT reporting across member states. However, if you hold stock in Germany, you must still register locally for VAT.

2. German VAT Rates: What to Charge?

The standard German VAT rate is 19%. However, a reduced rate of 7% applies to specific goods like books, certain foods, and cultural services. Make sure to verify which rate applies to your product category to ensure correct pricing and invoicing.

3. VAT Invoicing Requirements

German law has strict invoicing rules. Invoices must include:

• Your VAT number and that of your customer (if B2B)
• Date of issue and date of supply
• Description of goods or services supplied
• Net amount, VAT rate, and total amount including VAT
• Sequential invoice number

Electronic invoices are allowed but must meet specific authenticity and integrity requirements.

4. OSS (One-Stop Shop) for EU Sellers

Since July 1, 2021, EU-based online sellers can report cross-border B2C sales of goods and services within the EU through a single OSS VAT return. This eliminates the need for multiple VAT registrations in different EU countries—unless you store goods locally (e.g., in Germany), in which case a German VAT number is still necessary.

5. IOSS (Import One-Stop Shop) for Non-EU Sellers

Non-EU sellers shipping goods worth less than €150 to EU consumers can use the IOSS scheme. This allows VAT to be collected at the point of sale, creating a smoother experience for the buyer and avoiding customs delays.

6. Selling via Marketplaces (Amazon, eBay, etc.)

Marketplaces operating in Germany are responsible for collecting and remitting VAT on behalf of third-party sellers in certain cases. However, you still need to:

• Display your VAT ID on your marketplace profile
• Ensure compliance with German tax law (e.g., submit tax certificates if requested)
• Track your sales and know when you're liable to register independently

7. Filing VAT Returns in Germany

Once registered, you must file regular VAT returns—usually monthly or quarterly depending on turnover. You’ll also need to submit an annual VAT return and, in some cases, EC Sales Lists for intra-community supplies.

8. Penalties for Non-Compliance

Germany has a strict tax enforcement system. Failure to register, charge, or remit VAT correctly can lead to fines, backdated tax liabilities, and even trading bans on platforms like Amazon.de.

Conclusion: Plan Ahead and Stay Compliant

Understanding and complying with German VAT rules is essential for success in one of Europe’s biggest markets. Whether you're an EU-based seller using the OSS or a non-EU business shipping directly to consumers, it’s worth consulting a tax advisor or using a VAT compliance service.

Staying informed and compliant with German tax law doesn’t just keep you out of trouble—it helps build trust with German consumers and strengthens your brand reputation in the EU.