Understanding German VAT

If you work with VAT in Germany, you should understand these terms and principles:

• VAT returns must be completed for each month by the tenth day of the following month and filed with the local tax office.

• You must pay any excess output VAT over input VAT at the time of filing.

In Germany, these transactions are nontaxable:

• Transactions within the same entity.

• Transactions for the transfer of business.

• Transactions for subsidies, penalty payments, and compensation.