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  • Mar 20, 2020
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    Trade with Non-EU Member States

    Goods imported from non-EU states are liable to import VAT called import turnover tax (Einfuhrumsatzsteuer). The import turnover tax rate equals the VAT rates of 19 percent or 7 percent and is paid to the customs authority.
    However, the import turnover tax on goods imported from non-EU states can be deducted as input tax (Vorsteuer). As a prerequisite, the company must have the necessary import documents with customs proof of payment (import declaration).
    Exports are exempt from VAT.

  • Mar 20, 2020
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  • Mar 20, 2020
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    Trade Within the European Single Market

    Trade within the EU is free from customs and other restrictions. However, goods traded between different EU member states are subject to so-called acquisition tax (Erwerbssteuer).
    Acquisition tax is payable by the recipient of the goods. If an EU company exports goods to a company located in another EU member state, the delivering company therefore neither has to pay customs or charge VAT. The company in the other EU member state receiving the goods has accordingly to pay acquisition tax.
    Acquisition...

  • Mar 20, 2020
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    Input VAT (Vorsteuerabzug)

    On purchasing goods or making use of services, companies regularly have to pay value-added tax themselves. The taxes collected and paid can be balanced out in the input VAT deduction (Vorsteuerabzug). For companies, value-added tax represents a transitory item only.


    Example: How Input VAT is Balanced
    A car dealer has sold ten vehicles in one month, each at a gross price of EUR 17,850 (net cost EUR 15,000). For each sale, the dealer receives EUR 2,850 in VAT from the customer. At the end of the...

  • Mar 20, 2020
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    Value-added Tax in Germany

    Companies must add value-added tax (VAT) to their prices. Thus, VAT is only paid by the end user of a product or service. Companies transfer the VAT received to the tax authorities on a monthly, quarterly, or annual basis. The frequency generally depends on the level of company turnover.
    The normal VAT rate of 19 percent is just below the European average. A reduced rate of 7 percent applies to certain consumer goods and everyday services (such as food, newspapers, local public transport, and hotel...

  • Mar 20, 2020
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    Real Property Transfer Tax

    When domestic real estate is sold or changes owner, a one-time real property transfer tax (Grunderwerbssteuer) of the purchase price is levied if the purchase price or consideration exceeds EUR 2,500. Real property transfer tax is usually paid by the buyer. The tax rate varies from federal state to federal state. Please see the table below for more information.


    Real Property Transfer Tax Rates in the Respective Federal States 2020

    3.5%
    Bavaria, Saxony

    4.5%
    Hamburg

    5.0%...

  • Mar 20, 2020
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    Determining the Real Property Tax Burden

    Real property tax burden for a commercial building in a municipality in a Western German Federal State with an average real property tax "B" collection rate of 464 percent:

    Assessed Value
    EUR 1,000,000 (e.g.)

    x Basic real property tax rate
    x 0.35 percent

    x Muncipial multiplier "B"
    x 464 percent

    = Real property tax burden
    = EUR 16,240 (or approx. 1.62%)
    Due to a reform of real property tax, the basic real property tax rate „B“ will be lowered to 0.034 percent from 2025 on.

  • Mar 20, 2020
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    Real Property Tax Rate

    The real property tax burden is calculated by multiplying:
    the assessed value of the real property
    the real property tax rate
    the municipal multiplier
    The assessed real property value is determined by the tax authorities according to the German Assessment Code (Bewertungsgesetz). The German Assessment Code refers to historical property values that are usually significantly lower than current market value.
    The tax rate varies between 0.26 percent and 1 percent depending on the Federal State (the real...

  • Mar 20, 2020
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    Real Property Tax

    Every property owner in Germany is liable to pay real property tax (Grundsteuer). The tax rate depends on the type of real property. This is sorted into two distinct categories:
    Real property tax "A": Real property used for agriculture and forestry.
    Real property tax "B": Constructible real property or real property with buildings.
    Due to a fundamental real property tax reform, a real property tax type „C“ will be introduced from 2025 on. Municipalities can impose it for undeveloped areas which are...

  • Mar 20, 2020
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