VAT refund in Germany

Explained by a German tax lawyer

In Germany, companies have to pay 19% value added tax (VAT) to the tax office when they purchase goods. The tax amount is already included in the sales price of goods. If turnover is generated through the sale of goods, companies must pay the corresponding amount of VAT to the tax office.

If companies buy goods from other companies, they also pay the VAT amount included in the purchase price ("Vorsteuer"). German companies can claim this as part of their "Vorsteuerabzug". A special feature for companies from certain non-EU countries is that they can receive a refund of the VAT paid in Germany. On this page, we explain how this works and what you need to bear in mind when applying for a refund.

What is a VAT refund?

A VAT refund allows companies based in a non-EU country to receive a refund of the VAT paid in Germany on the purchase of goods, provided the company does not make any other taxable transactions in Germany. Depending on the product purchased, this involves a tax rate of 19 % or 7 %, which is included in the purchase price on a pro rata basis.

A VAT refund is possible under the conditions of EU Directive 2008/9/EC.

Requirements for VAT refund in Germany

How to apply for a VAT refund in Germany?

Firstly, all companies must pay the full purchase price for the goods in Germany – including VAT. A tax refund can only be applied for and carried out afterwards. 

Companies can apply for a VAT refund online via a portal of the German Federal Central Tax Office (BZSt), the so-called BZSt online portal (BOP), or analogue via corresponding application forms. The respective VAT amounts to be refunded must be listed individually in the application. You must therefore attach all invoices and receipts relevant to the refund.

The following serve as verification:

• Original invoices showing the VAT paid – in the case of multi-page documents, all pages must be submitted

• Documents proving the business purpose of the expenses (e.g. in connection with business trips, conferences)

• Certificate of taxable status: a document from your country of residence showing that your company is registered under a tax number there; the certificate must be up-to-date and include the name, address, business activity and tax number as well as an official stamp and signature of a government office

As soon as the seller in Germany receives proof that the goods have been properly exported from the EU, they can refund the VAT. 

ATTENTION: The application for VAT refund must be received by the BZSt, including all documents, no later than six months after the end of the year in which the VAT was paid. Once the application has been processed by the German tax authorities, a decision will be sent to the company.

What expenses can be reimbursed?

Reimbursable costs regularly include

• Stand fees & entrance fees at exhibitions and conferences in Germany

• Costs on business trips for hotels, rental cars and catering

• Costs for materials, machinery and office supplies that count as business purchases

Reimbursable costs may not include

• Costs for luxury goods intended for clients (‘representation costs’)

VAT refund for consumers

People who do not run a business and do not buy goods from Germany on behalf of a business must also pay the VAT included in the purchase price. Just like companies from non-EU countries, they can receive a refund of the VAT paid under certain conditions. In this way, tourists can save money if they export goods directly from Germany.

Prerequisites

The prerequisite for a VAT refund is that they are non-EU citizens (i.e. resident outside the EU) who have purchased goods in Germany and then exported them from the EU within three months of the purchase. The nationality of the buyer is irrelevant in this context. The purchase price of the goods including VAT must also have been at least EUR 50.01.

The goods must have been purchased exclusively for private purposes. In addition, the goods must have been exported from Germany directly by airport to a non-EU country.

Procedure

In order to qualify the purchase for a VAT refund, buyers must request a corresponding form, so-called ‘Ausfuhrbescheinigung’ or export papers or tax-free shopping check, when purchasing the goods. 

At the airport, these papers, as well as the original proof of purchase and the goods, must be stamped by customs to mark them as tax free. The goods and necessary documents must therefore be carried in your hand luggage. 

Once you have arrived with the goods in your home country (non-EU country), you can apply for a VAT refund in Germany via a corresponding VAT refund station. The stamped invoice will then be sent back to the seller who sold the goods in Germany. As soon as the seller has received proof of proper export, they can refund the VAT.

In very special exceptional cases, a certification can also be obtained from a German consulate abroad. A convincing explanation must be given as to why it was not possible for the buyer to obtain the certification at the German airport.

ATTENTION: Some goods are not suitable for VAT refund due to their nature. These include

• Services used in Germany, such as bus tickets, train tickets, restaurant bills, hotel bills, etc.

• Fuel or oil for vehicles of any kind and vehicle spare parts

Great Britain & Ireland

Since Brexit in 2021, Ireland has been treated as if it were part of the EU. This means that buyers from Ireland cannot claim a VAT refund in Germany and therefore cannot buy goods free of VAT.

The situation is different for citizens of Great Britain – i.e. England, Scotland and Wales. They can claim a VAT refund if they can provide valid proof that they come from a non-EU country. For example, a current British driving licence is sufficient.

Please bear in mind that the VAT refund regulations can change at any time and that there may be differences and variations between the various non-EU countries. For the latest information on VAT refunds, please contact our tax experts.

VAT refund – corrected invoice

If you as the buyer have received an incorrect invoice from the retailer, incorrect VAT charges cannot be refunded immediately. If you submit an incorrect invoice as part of the VAT refund, the VAT will not be refunded to you.

This is because incorrectly invoiced VAT (e.g. overcharged) must first be corrected. The retailer is responsible for this. If the incorrect invoice has been corrected by the seller, a VAT refund can be applied for with this new corrected invoice.