If you run a company from outside Germany and operate in the German market, you may wonder whether you need a tax representative. The answer is: you don’t have to, but you can. German law does not require the mandatory appointment of such a person. The exception is when a company does not plan to reclaim VAT and only conducts exempt supplies. In that case, a tax representative can make life easier and facilitate communication with the German tax authorities.
When is it worth appointing a tax representative?
A tax representative in Germany is particularly useful when dealing with unusual or one-off operations in the German market. For example: you import goods into Germany just to transport them immediately to another EU country, or you conduct cross-border transport of goods without using supplies that allow VAT deduction. In such cases, it’s better to entrust formalities to someone who fully understands German tax procedures.
Who can be a tax representative?
German law clearly defines who can act as a tax representative. The person or entity must be registered in Germany and cannot be a “small business” under §19 of the German VAT Act. This ensures that the representative is credible to the German tax office and can manage all the bureaucracy.
In practice, tax representatives are usually:
Tax advisors and accountants
Freight forwarding companies handling customs import clearance
Other German business entities involved in international trade
Important: Before acting on your behalf, the representative must have a written power of attorney. If it is not in German, the tax office may require a certified translation. It may seem cumbersome, but the German tax authorities do not accept half-measures.
What does a tax representative do?
Primarily: they act on your behalf. They submit VAT returns, handle correspondence with the tax office, obtain a tax and VAT number for your company (separate from their own). This number must then be used in all documents and filings. In practice, the representative handles all VAT matters in Germany – from formalities to ongoing obligations. For you, this is a huge convenience, especially if you don’t know the language, procedures, or want to avoid bureaucracy.
When does the representative stop acting?
The relationship with a tax representative is not permanent. It can end for two reasons: if you revoke the power of attorney or if the German tax office decides it does not want to work with that representative. The latter may occur if the representative fails to fulfill duties or mishandles documents. In all cases, the representative must officially notify the tax office of the termination and ensure all outstanding returns are submitted.
Tax advisor is not the same as a tax representative
Appointing a tax advisor – someone who represents your company before the German tax authorities or court – is a separate matter. This is not a tax representative under VAT law; the advisor acts in the company’s interest, not as a VAT agent.
In some situations, appointing an advisor or a correspondence recipient may even be mandatory. This is important if you plan a long-term presence in the German market or regularly work with German partners.
What about companies outside the EU?
Here, things get more complicated. If you operate a company outside the EU, you cannot simply import goods into Germany in your own name. In this case, you must use an indirect customs representative – unless you qualify for an exception. Practically, this means that without a local partner or intermediary, you cannot handle customs clearance or legally conduct import activities.
Do you need a tax representative?
If you want to enter the German market strategically and do not plan full VAT registration, a tax representative can be very helpful. Especially if you operate at the edge of deduction rights, import goods temporarily, or want to avoid paperwork. It is not mandatory, but sometimes it is the most sensible solution.