Value added tax

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... in the info section ‘Value added tax’ can be accessed directly via the following links. You can access all content via the drop-down menu under 'Value added tax' above.

Basics of value-added tax in Germany
Value-added tax on foreign transactions
Value-added tax for artistic services
Value-added tax on the deliveries of works

The most important points

When a service is provided, the question always arises as to whether an invoice should be issued with or without value-added tax (VAT). If an invoice must be issued with VAT, either the reduced rate of 7% (e.g. for performances or the sale of rights of use) or the standard rate of 19% applies. There are exemptions for small businesses, for various artistic services as defined in Section 4 number 20a of the UStG (German VAT Code) and for educational services as defined in Section 4 number 21a and b of the UStG.
In cross-border invoicing, a distinction must always be made between invoices to businesses (B2B) and private consumers (B2C). Self-employed artists or artistic organisations/associations are usually active as businesses. In general, cross-border B2B invoicing is often easier than B2C invoicing.
If we invoice a business abroad (or vice versa) (B2B), VAT is payable where the recipient of the service is established. The recipient of the service is responsible for paying the VAT. This is known as the reverse charge procedure. Within the EU, we require the International VAT Identification Number, also known as the EU VAT number or UID number, for invoicing purposes.
Stage directors, stage artists (musicians, actors, dancers, performers) and stage choreographers resident abroad may also be exempt from VAT under German national law. They need a certificate issued in their name.
If businesses based in Germany (including sole traders, freelancers, etc.) purchase a service from abroad (EU and non-EU) for their business/self-employed activity, they must report and pay VAT in Germany as service recipients. This means that they receive a net invoice from abroad and must declare and pay German VAT to their tax office in addition to the invoiced net amount. If they are liable for VAT in Germany, they can claim a refund of the VAT owed as input tax. If they are exempt from VAT in Germany (e.g. as a small business), they aren’t entitled to deduct input tax. The VAT owed, therefore, becomes an additional tax burden that must be considered, for example, when putting together a budget/finance plan.

When artists and creative professionals work internationally, they are faced with the question of which activities require them to pay value added tax in which country. Those who invite, commission and collaborate with artists (e.g., organisers, other artists, customers, clients) also often have to deal with questions concerning the payment of value added tax:

Does the reverse-charge procedure apply?
Does it make a difference whether a work of art is delivered to a country inside or outside the EU?
Does a small business owner (Kleinunternehmer) who hires a dancer from abroad have to pay value added tax?
Under what conditions are performances by musicians from abroad exempt from value added tax?
Does it make a difference whether an artist from Germany sells a painting to a private individual or a gallery abroad?
When should a value added tax identification number (VAT ID) be indicated on the invoice?

These and other questions will be answered in the sections VAT on foreign transactions, Transactions to Germany and Transactions from Germany.

Information on the basics of value added tax in Germany can be found here.

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