The rate
The standard rate in Germany is 19%. Some goods and services carry reduced or zero rates and others are exempt. The difference matters: zero-rated sales still let you reclaim the tax on your purchases, exempt sales do not.
Who must register
There is no general registration threshold: every Unternehmer registers with the Finanzamt. The figures govern the Kleinunternehmer exemption in section 19 UStG, rewritten from 1 January 2025 and unchanged for 2026: no VAT on your supplies if turnover stayed at or below 25,000 EUR last year and stays at or below 100,000 EUR this year. The 100,000 EUR limit bites on the transaction that breaches it. Waiving the exemption binds you for five calendar years.
How to register
There is no separate VAT application in Germany. A business registers by notifying the tax authorities of its start (section 138 AO). A trader or other commercial business reports the opening to its municipality (Gemeinde, the Gewerbeanmeldung), which informs the Finanzamt. A freelancer reports directly to the Finanzamt. A business can additionally use the electronic route to the tax office responsible for VAT (section 138(1a) AO).
The Finanzamt then collects further facts about the business through an official questionnaire, the Fragebogen zur steuerlichen Erfassung, which must be sent electronically in the prescribed data format (section 138(1b) AO). Only in cases of hardship does the Finanzamt allow paper.
A new business asks for a USt-IdNr. inside that questionnaire, and an existing one applies to the Bundeszentralamt für Steuern. The BZSt page on issuing the number says it is notified by post only, never by e-mail or telephone.
Filing and paying
Registered and filed with Bundeszentralamt für Steuern.
Advance returns are quarterly by default, monthly where last year's VAT exceeded 9,000 EUR, and the Finanzamt may drop them altogether below 2,000 EUR. Each Umsatzsteuer-Voranmeldung and its payment are due by the 10th day after the period, and a Dauerfristverlängerung moves both by a month. A Kleinunternehmer has been outside both the advance returns and the annual VAT return since the 2024 tax year.
Penalties for getting it wrong
A Verspätungszuschlag under section 152 AO. For advance returns the Finanzamt sets it at its discretion, capped at 25,000 EUR. For an annual return it is 0.25% of the assessed tax for each month of delay, at least 25 EUR a month, and becomes mandatory once the return is more than 14 months late.