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Germany Tax: Update on VAT refund claims for EU and non-EU entrepreneurs

Nonresident businesses incurring German input VAT in the course of their businesses for the purchase of goods and services from other entrepreneurs in Germany may apply to the German Federal Tax Office for a refund of the VAT. To qualify for the refund, the nonresident business must not be obliged to register for VAT in Germany under German rules and there must be reciprocity between the home country of the business and Germany. While the reciprocity condition is met for all EU Member States, exceptions apply for a number of non-EU countries.

New VAT refund claim procedures were introduced as from 1 January 2010, as a result of which different rules, application methods and deadlines apply for EU and non-EU claimants, with the most significant changes affecting EU businesses.

Non-EU businesses

For non-EU businesses, VAT refund claims can be submitted to the German Federal Tax Office either electronically with a qualified signature or in paper, but in any case the claim must be accompanied with the submission of original paper invoices. The non-extendible deadline for filing completed and compliant VAT refund applications for input VAT incurred in 2009 is 30 June 2010.

To be considered "complete and compliant," the following requirements must be met:

- The application form, including annexes, must be dated and signed by the legal representative of the company (i.e. not by a third party or an occasionally authorized person);
- A VAT taxpayer certificate issued within the last year (Form 6166 for U.S. entrepreneurs) must be presented; and
- The originals of compliant invoices containing input VAT must be presented.

EU businesses

For EU businesses, the VAT refund procedure completely changed on 1 January 2022 (and is applicable to VAT refund claims for 2009 that are filed in 2010) because EU businesses are now required to file their VAT refund claims electronically through a web portal in their Member State of residence, i.e. a company is no longer required to file a VAT refund claim in each Member State in which it incurred VAT. The Member State of residence will forward the VAT refund claim electronically to the Member States concerned.

Under the revised rules, the deadline for submitting VAT refund claims has changed from 30 June to 30 September of the following year and the refund authorities are bound by a new EC directive to respond to such claims within fixed deadlines by either issuing a refund or making further requests. Any delays caused by the tax authorities when processing a claim will lead to interest accruing in favor of the claimant.

While only scans of original compliant invoices have to be submitted, companies should be prepared for the tax authorities to request original invoices if there are any doubts.

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