If you run a business in Germany and are registered as a VAT taxpayer (Umsatzsteuerpflichtig), you are obliged to submit periodic VAT returns. This is not something you can do “whenever you remember.” The Finanzamt works according to fixed deadlines, and any delay can result in fines.
VAT (Umsatzsteuer) is an indirect tax, but your obligations are very direct. Whether you sell goods or services, issue invoices to businesses or private clients, you must report output tax (from sales) and input tax (from purchases) in periodic returns.
Monthly, Quarterly, or Not at All? How the Frequency Is Determined
The frequency of your VAT filings depends not on your preference but on the VAT reported in your previous year’s return:
New taxpayers – required monthly for the first two years of registration (though for 2021–2026 this obligation was suspended, so check with your local office).
Annual VAT above €7,500 – also monthly.
Annual VAT up to €7,500 – quarterly filing allowed.
Annual VAT up to €2,000 – the office may exempt you from periodic returns, but the decision lies with the Finanzamt.
If you are reclaiming VAT (e.g., from investments or purchases), you can voluntarily choose monthly filing even if you qualify for quarterly. This is common among companies purchasing expensive assets and wanting to recover VAT quickly.
Filing via ELSTER – How It Works in Practice
All VAT filings are done via ELSTER, the official platform of the German Ministry of Finance. You must register, obtain a security certificate (or use an alternative authentication method), and submit all returns electronically.
On ELSTER, you submit:
Monthly/quarterly returns (Umsatzsteuer-Voranmeldung)
Annual VAT return (Umsatzsteuer-Jahreserklärung)
After each submission, the system generates a Transmission Protocol (Transmissionsprotokoll) – print and store it. The tax office may request it, especially during audits or discrepancies.
Dauerfristverlängerung – Extending Deadlines with a “Bonus”
Germany allows you to apply for a permanent extension (Dauerfristverlängerung), giving you one extra month to file each VAT return. Example: instead of filing January by February 10, with the extension you have until March 10.
Sounds good, but there’s a catch: for monthly filers, you must pay 1/11 of the previous year’s total VAT liability as an advance to the Finanzamt by February 10. Without this, the extension is invalid, and late filing penalties apply.
VAT Refunds – When You Can Expect Money
If your return shows a VAT overpayment (input tax exceeds output tax), the office should refund it. In theory, this happens automatically. In practice, the Finanzamt often requests invoices, bank statements, and sometimes conducts audits. Large refunds almost always trigger checks. Refunds can also be offset against other tax liabilities or unpaid fines.
Annual VAT Returns – Summarizing the Year
Regardless of monthly or quarterly filing, you must submit an annual VAT return (Umsatzsteuer-Jahreserklärung). This applies to all companies unless exempted under new rules (from 2024 – only some small businesses).
Standard deadline: July 31 of the following year.
With a tax advisor (Steuerberater): deadline extended to end of February of the next year.
All annual returns must be filed electronically with an electronic signature. Documentation must match periodic filings; discrepancies will trigger questions, corrections, or audits.
Common Mistakes to Avoid
Late submission – the 10th of the month is a strict deadline. Late filings incur interest and sometimes fines.
Missing Transmissionsprotokoll – without it, the office assumes you did not submit the return.
Incorrect VAT rates – Germany has multiple rates (19%, 7%, 0%), and mistakes are costly.
Unawareness of thresholds and exemptions – not knowing about quarterly filing options may result in unnecessary monthly submissions and extra accounting costs.
Small Businesses and Micro-Entities – Any Changes?
From 2024, some small businesses can be exempt from annual VAT returns. However, this does not mean every micro-entrepreneur can ignore it. The Finanzamt can request returns at any time, even retroactively. Deliveries of new vehicles or using OSS/IOSS still require filing.
The German Tax System Can Be Strict, But Manageable
Periodic VAT returns in Germany are not difficult if you follow deadlines, ELSTER procedures, maintain documentation, and submit annual summaries. Proper bookkeeping – whether in-house or via an accountant – makes everything repeatable.
Do not play with deadlines, do not ignore the system, and always keep a copy of every submitted document. This will save stress in case of interactions with the Finanzamt.