How to Charge VAT as a Freelancer in Germany

How to Charge VAT as a Freelancer in Germany: A Complete, Expat-Focused Guide

Step-by-step guide on how-to-charge-vat-as-a-freelancer-in-germany for expats living in Germany.

Introduction

Have you just moved to Germany, full of excitement, only to find yourself overwhelmed by seemingly endless paperwork and tax jargon? If you’re freelancing—whether as a creative, consultant, or IT professional—understanding German VAT (Value Added Tax, or Umsatzsteuer) is essential. Many expats believe charging VAT as a freelancer is impossibly complex, especially if you don’t speak perfect German. The good news? Armed with knowledge and guidance, navigating VAT in Germany is achievable—even empowering.

At liveingermany.de, we’ve guided thousands of expats through the practicalities of German life, from housing to handling local bureaucracy. This in-depth guide dissects how-to-charge-vat-as-a-freelancer-in-germany, offering a clear, actionable guide for expats in Germany who want to freelance legally, efficiently, and stress-free.

Understanding Expat Challenges Around VAT

Imagine Lara, a Canadian designer who recently moved to Berlin. Excited to start her freelance journey, Lara is soon hit by a barrage of questions: What’s the difference between VAT and income tax? Am I a “Kleinunternehmer”? What are the right words for my invoice? Every freelance expat faces similar confusion:

• Language Barriers: Government forms and official communication are often exclusively in German.
• Fear of Mistakes: Many fear legal trouble for inaccurate billing or tax returns.
• Complex Rules: Expats must quickly grasp the difference between standard VAT, reduced rates, and special rules for small businesses.

The emotional toll is real—uncertainty breeds stress, and the intricacies of VAT can make even confident professionals feel like beginners again. The key is practical, step-by-step guidance (with cultural context!) that makes German bureaucracy manageable.

How-to-Charge-VAT-as-a-Freelancer-in-Germany: A Practical, Expert Guide

Charging VAT as a freelancer in Germany involves clear steps, each rooted in official regulations (Accountable, MyStartupGermany, Fintiba).

What Is VAT—and When Do You Charge It?

• VAT (Umsatzsteuer) is a tax on most goods and services in Germany. Standard rate: 19%. Reduced rate: 7% (e.g. books, accommodation, some food, culture).
• Most freelancers must charge VAT, unless they qualify for the “small business exemption” (Kleinunternehmerregelung).

Sources:
MyStartupGermany: VAT Explained
Fintiba Freelancing Guide
Accountable: VAT for Freelancers

Step 1: Register as a Freelancer (Get Your Tax and VAT Numbers)

• Registration: Notify your local Finanzamt (tax office) you’re starting freelance work.
• Form: Complete the “Fragebogen zur steuerlichen Erfassung” (tax registration questionnaire)—available with English guidance.
• Helpful English resources: MyGermanExpert, ExpatTax
• Outcome: You’ll receive a Tax Number (Steuernummer) and, if required, a VAT ID (Umsatzsteuer-ID).

Tip: Registering with the Finanzamt early avoids delays in client payments—German clients often won’t pay invoices without a Steuernummer/VAT ID.

Step 2: Decide—Are You a Small Business (Kleinunternehmer)?

• Eligibility:
• If your annual turnover is < €22,000 this year and < €50,000 next year, you can opt for the Kleinunternehmerregelung.
• If you opt in:
• You DON’T add VAT to your invoices.
• You CAN’T reclaim VAT you pay on business expenses.
• Must write on invoices: “Exempt from VAT according to §19 UStG.”
• If you exceed the thresholds: You must charge VAT as usual.

Decision point: Weigh the benefits of simpler admin (Kleinunternehmer) versus reclaiming VAT on purchases (full VAT status).

Source:
MyStartupGermany: Small Business Regulation

Step 3: How to Issue VAT-Compliant Invoices

If you must charge VAT:

• Add 19% or 7% VAT depending on the service/good.
• Clearly show your tax number/VAT ID on each invoice.
• List:
• Net amount (without VAT)
• VAT rate and amount
• Gross amount (total)
• For EU B2B clients, sometimes VAT is not charged (reverse-charge rule).

In Germany, attention to detail is non-negotiable; missing VAT IDs or incorrect statements can cause rejected invoices or payment delays—so check twice!

Source:
Accountable Blog: VAT for Invoicing
ExpatTax B2B Invoice Guide

Step 4: Filing and Paying VAT

• Submit VAT returns—monthly or quarterly—via the ELSTER portal (elster.de).
• Calculate:
• Output VAT (what you owe from sales) minus Input VAT (what you paid on business expenses).
• Pay the net amount or claim a refund if inputs exceed outputs.
• File an annual VAT return each year.

Keep digital records and back up everything—German authorities expect precise, audit-ready documentation.

Source:
ExpatTax: Filing VAT in Germany

Step 5: Record-Keeping & Staying Compliant

• Store every invoice (issued and received) and receipts for business purchases.
• This isn’t just best practice—it’s legally required, and crucial if audited.

Key Considerations for Expats

• VAT registration allows you to reclaim VAT paid on your business expenses—a real financial boost!
• International clients: You don’t always need to charge VAT, but must know special rules, particularly with EU-based customers.
• Seek professional help: If you’re ever unsure, invest in a session with a tax advisor specialized in expat freelancers.

VAT Essentials at a Glance

Practical Tips for Expats Handling VAT in Germany

1. Set Up a Separate Bank Account

It’s easy to accidentally dip into tax funds. To stay organized, use a dedicated account or banking app to automatically set aside VAT and tax portions each month.

Reflective question: Could automating your finances reduce your stress about tax season?

2. Use English-Friendly Accounting Tools

German paperwork can be intimidating! Consider cloud-based tools with English support and integrations for ELSTER and invoicing. This not only reduces errors but also gives peace of mind.

3. Talk to Expats Who’ve Done It

Before you register for VAT, seek out other expats in communities or forums who’ve navigated the process—real experiences can clarify the process and save you from common mistakes.

What’s the biggest hurdle you currently face in settling into Germany’s freelance scene?

Solutions & Support for Expats: Context-Aware Affiliate CTAs

Are local banks and paperwork slowing you down?

• For English-speaking freelancers needing an easy, digital bank account: Try n26, Germany’s leading expat-friendly bank with fast setup and transparent fees.
  (Affiliate link – we may earn a commission at no extra cost to you.)

Want to make tax returns a breeze, even if you don’t speak German?

• Check out Wundertax Germantaxes, an English-language online tax solution for expats and freelancers. Get started in minutes.
  (Affiliate link – we may earn a commission at no extra cost to you.)

Why Trust liveingermany.de? Our Expat-Focused Expertise

At liveingermany.de, we know Germany inside-out because we’re expats and internationals, too. Our guides are carefully crafted—reflecting feedback from real newcomers and years of direct experience navigating German bureaucracy, from Anmeldung to VAT returns.

We’re committed to demystifying every step of German life:

• Step-by-step checklists, English-language templates, and supportive explainers.
• An engaged community of expats who help each other move from confusion to confidence.
• Trusted by thousands of readers and recommended by global expat groups.

Explore our library for checklists, expert interviews, and community forums. Your journey in Germany should be informed, stress-free, and even a bit inspiring!

Sources & Further Reading

• MyStartupGermany: VAT in Germany Explained
• Accountable: VAT for Freelance in Germany
• Fintiba: Freelancing in Germany for Internationals
• MyGermanExpert: Starting as a Freelancer
• ExpatTax: German Freelance Taxes

Data accurate as of 2025. For legal certainty, consult a professional tax advisor.

Copyright © liveingermany.de — Crafted by expats, for expats.

FAQ: How to Charge VAT as a Freelancer in Germany

What is how-to-charge-vat-as-a-freelancer-in-germany?
It’s the process all freelancers in Germany follow to collect and pay Value Added Tax (VAT) on their work. Whether you need to charge depends on your turnover and whether you use the Kleinunternehmerregelung.

How to get started with how-to-charge-vat-as-a-freelancer-in-germany?
Register your freelance activity with your local Finanzamt, get your tax number and (if needed) VAT ID, and decide whether you qualify for the small business exemption. Then, issue invoices correctly and file VAT returns as required.

Is how-to-charge-vat-as-a-freelancer-in-germany available for expats?
Absolutely! Both Germans and expats must comply with VAT rules if freelancing. Support resources and tax advisors experienced with international freelancers can make the process much smoother.