tax
Umsatzsteuer (VAT)
Also known as: VAT, Mehrwertsteuer, USt
Umsatzsteuer is the German term for VAT (Value Added Tax) — a consumption tax of 19% (standard) or 7% (reduced) added to most goods and services and remitted monthly or quarterly to the Finanzamt.
In 30 seconds
- Standard rate: 19%
- Reduced rate: 7% (food, books, public transport)
- Filed: Monthly or quarterly via Umsatzsteuer-Voranmeldung
- Filed where: ELSTER → Finanzamt
- Threshold to register: €22,000 prior year (Kleinunternehmerregelung threshold)
How Umsatzsteuer works
If you’re VAT-registered, you charge customers 19% (or 7%) on top of your prices and forward that money to the Finanzamt. In return, you can deduct the VAT you paid on business expenses (called Vorsteuer = input tax). The net amount — what you collected minus what you paid — is what you actually owe.
Filing schedule
- Monthly if your annual VAT bill is over €7,500
- Quarterly if under €7,500
- Annually if under €1,000
You file via the Umsatzsteuer-Voranmeldung in ELSTER, typically by the 10th of the following month (with a possible Dauerfristverlängerung extension).
Special cases
- Kleinunternehmerregelung (§ 19 UStG): If your prior-year revenue was under €22,000 and current year is projected under €50,000, you can opt out of charging VAT entirely.
- Reverse Charge: B2B invoices to other EU countries flip the VAT obligation to the buyer.
- Mixed rates: A restaurant invoice can have 7% (food) and 19% (alcohol) on the same line — careful with bookkeeping.