How to Charge VAT as a Freelancer in Germany

How to Charge VAT as a Freelancer in Germany: An Expat’s Step-by-Step Guide

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

Introduction

Moving to Germany as a freelancer can be both exciting and overwhelming—especially when faced with the famous German bureaucracy. Are you puzzled by terms like “Umsatzsteuer” and “Kleinunternehmerregelung”? Wondering if you need to collect VAT, or how to avoid costly mistakes in your invoices?

You’re not alone. Many expats and newcomers find German tax rules especially confusing. But the good news: With the right information, charging VAT as a freelancer in Germany is absolutely manageable—even if you’re just starting out, or your German language skills are a work in progress.

At liveingermany.de, we’ve helped thousands of expats navigate the ins and outs of freelancing, accounting, and VAT requirements. This guide brings together essential steps, expert tips, and practical examples, all tailored for expats living in Germany.

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The Real Expat Challenge: Demystifying German VAT Rules

Imagine you’re Liam, a designer from Ireland, who just registered as a freelancer in Berlin. You land your first German client. But when it’s time to send your invoice, they ask for your VAT number—and you realize you have no idea what to do next. Panic sets in.

The confusion is real:
- “Do I even need to charge VAT?”
- “How do I register for VAT in Germany?”
- “What if I make a mistake—will I get fined?”

In Germany, following VAT (Umsatzsteuer) rules is not just about getting paid; it’s about staying compliant and avoiding penalties. The rules are clear but can be daunting, especially if you’re used to a more relaxed system back home.

Step-by-Step Guide: How to Charge VAT as a Freelancer in Germany

All expat freelancers need to know: to legally charge VAT in Germany, you must register with the tax authorities, understand thresholds, issue compliant invoices, and file returns on time. Here’s exactly how to do it.

1. Register Your Freelance Activity

How it works:
- Complete the Fragebogen zur steuerlichen Erfassung (tax registration form).
- Submit it to your local Finanzamt (tax office).
- This can usually be done online at the ELSTER portal (some portals offer English support).
- You’ll receive a Steuernummer (tax number) and—if you intend or need to charge VAT—an Umsatzsteuer-ID (VAT number).
- Be ready with your bank details and a clear business activity description. Learn more

Tip: Find your local Finanzamt via the official government website.

2. Kleinunternehmerregelung or Regular VAT? Know Your Status

Thresholds matter:
- If your previous calendar year’s turnover was below €22,000 AND you don’t expect more than €50,000 this year, you may choose the Kleinunternehmerregelung (Small Business Scheme).
- Under this:
- You do NOT charge VAT on your invoices.
- You cannot deduct input VAT paid on expenses.
- Every invoice must state: “Gemäß §19 UStG wird keine Umsatzsteuer berechnet.”
More details here

• If you are above the thresholds—or opt out of the small business rule:
• You must charge VAT (usually 19% standard, or 7% reduced for some services).
• VAT must be clearly shown on invoices.

Remember: Once you start charging VAT, you must file VAT returns and pay VAT collected to your Finanzamt.

3. How to Issue a VAT-Compliant Invoice

Making mistakes on invoices is a common expat pitfall. In Germany, every VAT invoice must include:

• Your name and address
• Your Steuernummer and, if applicable, your Umsatzsteuer-ID
• Client’s name and address
• Unique invoice number and date
• Service description
• Net amount, VAT amount (and rate), and gross total
• Date service was delivered

If you use the Kleinunternehmerregelung, that legal note about not charging VAT is a must. Read more

4. Collecting and Paying VAT

• Charge the correct VAT on everything that isn’t exempt.
• Remember: VAT is not your money—transfer what you collect to the state via your Finanzamt.
• Forgot to add VAT to an invoice? You’re still liable to pay it from the total received. Mistakes can be costly! See details

5. Submitting VAT Returns (“Umsatzsteuervoranmeldung”)

• File monthly, quarterly, or annually via the ELSTER portal, depending on your turnover:
• Under €2,000 VAT/year → file annually
• €2,000–9,000 → file quarterly
• Over €9,000 → file monthly
• Returns are due by the 10th of the following month/quarter. Late submissions incur penalties.
• In each return, declare the VAT you’ve charged and deduct input VAT from business expenses—you pay the difference. Further information

Practical Tips for Expats: Avoiding Common Mistakes

Being organized and proactive can save you major headaches as a freelancer in Germany. Here are top tips:

• Open a business bank account to keep your freelance finances separate and tidy.
• Use expat-friendly accounting software or get a tax advisor—especially if your German isn’t fluent.
• Keep digital copies of every invoice, contract, and receipt—German bureaucracy loves documentation.
• Find your local Finanzamt online; each city has a different office and, sometimes, varying service levels.
• Stay on top of deadlines—punctuality is non-negotiable in German tax culture.

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Live in Germany’s Expertise: Your Expat Partner

At liveingermany.de, our guides are created by expats for expats—we know what it’s like to stand in line at the Finanzamt confused by paperwork, or to panic over a letter in German. We offer:

• In-depth, step-by-step guides for essential expat tasks
• Regular updates based on community feedback and legal changes
• Checklists, expat community insights, and free resources

Thousands trust us every month to help them settle into German life, from banking to bureaucracy and beyond.

Citations & Further Resources

• How to charge VAT as a freelancer in Germany—liveingermany.de
• Freelance tax registration—myGermanExpert
• German Tax IDs for Freelancers—MyStartupGermany
• Umsatzsteuer: What freelancers need to know—Norman.finance
• Taxes for Freelancers—germany-visa.org

Explore all you need to know about how-to-charge-vat-as-a-freelancer-in-germany in Germany – simplified for newcomers and expats.

Frequently Asked Questions: VAT for Freelancers in Germany

What is how-to-charge-vat-as-a-freelancer-in-germany?
It’s the step-by-step process enabling freelancers in Germany to register, charge, and remit Value Added Tax (VAT) on their services in compliance with German law.

How to get started with how-to-charge-vat-as-a-freelancer-in-germany?
First, register with your local Finanzamt by submitting the “Fragebogen zur steuerlichen Erfassung.” Assess whether you qualify for the Kleinunternehmerregelung or must charge VAT. Then, invoice professionally and file VAT returns.

Is how-to-charge-vat-as-a-freelancer-in-germany available for expats?
Yes! Any freelancer in Germany—regardless of nationality—must follow these steps. Many tax offices and online services offer support in English.