The German Value Added Tax Act provides tax exemptions for
- Small enterprises whose total turnover during the past year was below 17,500 € and whose turnover presumably will not exceed 50,000 € as provided in Sec. 19 of the VAT Act.
- Specific kinds of service listed in Sec. 4 of the VAT Act like exports, border-crossing shipments within the European Single Market
- Specific Service Sectors like health services, education services, financial services, real estate dealing, and voluntary services to name a few
However, According to Section 9 of the VAT Act taxpayers may optionally pay VAT even for exempt turnover, in order to deduct input taxes, as this sometimes might be more profitable.
Since VAT is a very complex subject and there are many different cases and exceptions, it is recommended that all trading companies seek competent advice in this area, to make sure that they are fully informed about the taxes that apply to their products. A suitable tax advisor might be found through the search engine of the German Association of Tax Advisors.