Foreign companies that are not registered in Germany and do not generate turnover that is liable to German VAT are eligible to apply for a VAT refund.
According to the new EU Directive 2008/9/EC which came into effect on January 1, 2010, enterprises registered in other EU member states must apply for a VAT refund at their local tax administration offices and follow the refund procedures required in their home country.
Businesses from outside the European Union need to send their VAT refund application and the relevant attachments to the competent German Tax Office. It is recommended to apply online in order to accelerate the process. The Federal Central Tax Office (FCTO) provides detailed information on the refund procedures and offers additional support on its Tax Information Center website.
Private individuals only may request VAT refunds, if they purchase goods in Germany to take to a non-EU country. The German Customs Office is generally responsible for the refund procedures relating to private persons.
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.
VAT-Refund for Foreign Exhibitors
Foreign companies seeking to exhibit their products and services in a trade fair in Germany have the possibility to apply for a VAT refund depending on the country where their business is established. As stated above, VAT will be refunded to companies from other EU-Member States. Entrepreneurs from non-EU states are only entitled to a VAT refund if no VAT or similar tax is raised in their home country or if the foreign government has signed a reciprocity agreement with Germany.
In general, expenses are refunded for:
- Trade fair expenses (exhibition booth rental, assembly, construction, etc.)
- Accommodation and travel expenses (hotel, taxi, food, parking fees, etc.)
- Expenses incurred while visiting customers in Germany
- Service costs (interpreters, advertising, catering, etc.)
All invoices must be collected and submitted to the Federal Central Tax Office with a formal request for a VAT refund. The procedure is called ''input tax refund procedure'' (in German: Vorsteuer-Vergütungsverfahren). You can also contact a VAT service company to have the paperwork done. Some German trade fair companies offer this service for a fee. Be aware that the VAT refund application must be received by the Federal Central Tax Office by June 30th of the year following the purchase.