Many FBA sellers in Europe start their career on the German Amazon market. Therefore, they need a German VAT number if their annual turnover reaches the VAT threshold of Germany or, since July 2021, the new EU-wide threshold. Make sure to stay tax and VAT compliant and find out all you need to know about this limit in Germany.
Maximilian GamplLast Updated on 22 October 2021
VAT Threshold Limit for Germany
There are several reasons that lead to VAT duties in a country. A VAT registration is required in some cases, for example when reaching the annual turnover threshold (VAT threshold) for distance selling.
Up until July 2021 you needed to get a VAT ID in the country of import when the value of goods sold to this country (via distance selling and within one calendar year), exceeded the limit set by the country you were selling to. These VAT registration limits were set individually in each and every country.
As soon as you reached the threshold, the place of taxation changed and VAT duties arose in the country you are selling to. VAT registrations, filing returns, intrastat, etc. then had to be made from this time on.
The changes of place of taxation are no longer dependend on country-specific VAT thresholds, which were abolished in July 2021. Instead an EU-wide threshold for distance selling of € 10,000 is now the decisive factor. I a distance sellers turnover stays below this new threshold, deliveries and services are still taxed at the local VAT rate and VAT is paid in the home country. But as soon as distance sales across the board exceed this lower EU-wide threshold, VAT is due in each country in which the goods are sold. In this case, you also need to register for VAT in these countries.
Example for VAT Treshold Limit in Germany:
You are an online seller based in France and sell to several European countries. The products you sell online to Germany are worth €50,000. This was no problem. As soon as the annual sales superceded €100,000 you needed to register for VAT in Germany as the annual VAT threshold limit for Germany was €100,000.
A sales volume of € 50,000 may have been below the former german threshold. However it is above the new EU-wide VAT threshold of € 10,000. Sales below that limit are still taxed with the french VAT rate and VAT needs to be paid in France. However, all sales to Germany above the € 10,000 mark need to be taxed with the german VAT and VAT needs to be paid to the german tax office. Starting at that mark the registration for VAT and filing of VAT returns in Germany are also necessary.
Threshold Limit Germany in USD & EUR
If your are selling below the thresholds, you won’t need to register for VAT. However, as soon as it is reached, a VAT registration, returns and filings are also necessary.
Attention: Since the new VAT threshold of € 10,000 applies across the EU it can be reached by sales to all memeber states combined. It is no longer necessary to reach individual thresholds in order to become subject to VAT. If the mark is reached across the board, for example through sales to Poland, Austria and Germany, registration is due in all of these countries at the same time.
VAT Registration in Germany
VAT Returns in Germany
|previous VAT threshold Limit Germany||~ $108 000||100 000€|
|new EU-wide threshold||~ $11 900||100 000€|
Since the new threshold is much lower than previous country-specific ones, most distance sellers will cross it sooner or later. In that case, using the one-stop shop or the “OSS” process might be more useful. In this case, the EU-wide VAT threshold does not apply at all, but the VAT registration, filings of returns, and payment of VAT in several countries are significantly simplified. Hellotax can help register sellers for and manage OSS.