Reclaiming German Value added tax (VAT) by a foreign business

Companies that are resident outside of Germany and want to get a refund of German VAT can reclaim the value added tax from German tax authorities for companies from specified countries under certain defined conditions in Germany.  VAT is recoverable from the German tax authority for previous purchases in Germany under the German Value Added Tax Act.

Priciples of refunding VAT taxes in Germany

What is VAT? German VAT is called Umsatzsteuer (USt) or Mehrwertsteuer (MwSt).

Value Added Tax is a tax raised at every stage of the economic process from a manufacturer or a service provider to the retailer and/or customer and is ultimately borne by the end consumer.

Depending on the kind of product or service, German VAT on a level of 7 % or 19 %  is charged.

It can sometimes be charged to a foreign business buying German goods or services and for certain countries there is a way to claim this tax back under certain circumstances.

The reclaim procedure

30th June each year is the deadline for filing an application for a refund of German VAT.