You may think complying with Peru’s VAT obligation is simple, but there is plenty to consider. Peru has several mandates at play for businesses, such as e-invoicing, and both time and effort are required to stay compliant.
Consider the need to stay on top of mandates as they evolve, and you will realise that your organisation needs to pay constant attention to what you do in the present and the future.
This page is the ideal place to stay on top of your tax obligations in the country.
Monthly
Between 7th-16th day of the month following the end of the tax period
VAT rates
18%
10%
0%
VAT rules in Peru
There are multiple tax-related mandates businesses operating in Peru need to be aware of, including:
Peru e-invoicing
Peru is deep into its electronic invoicing journey, with an e-invoicing mandate in place for all taxpayers. The activity is regulated by the Electronic Issuance System and includes more electronic documents than just electronic invoices.
There are multiple electronic issuance systems in Peru that help generate electronic payment receipts. These systems can be public, commercial or private.
The main SEE systems are:
SOL issuance system: Mainly for small taxpayers and independent professionals to produce electronic receipts
Issuance system from the taxpayer’s systems: Made according to the taxpayer’s measures and needs to issue electronic receipts.
SUNAT billing issuance system: For issuing electronic receipts
Electronic services operator issuance system: The process of validating the CPEs generated by the taxpayer’s issuance systems requires entities authorised by SUNAT to electronically verify CPEs to be considered issued
Sovos is an official Operator of Electronic Services in Peru, as well as an Electronic Services Provider (PSE). Find out more about our global e-invoicing compliance solution.
Requirements to register for VAT in Peru
Awareness is key when considering your VAT obligations in Peru. The country has no VAT threshold, meaning businesses must register having provided their first taxable supply.
It also requires non-resident organisations to register for VAT at the point they perform their first taxable activity.
Taxpayers in Peru must register for a ‘Registro Unico de Contribuyente’, a unique identification that covers VAT but also other taxes. The required documents include:
Form 2119
Evidence of incorporation
The company’s Public Registry documentation
Peru will enforce a new VAT rule from 1 December 2024. Non-resident providers of digital services will be required to register for VAT at 18% when providing digital services to consumers in Peru.
Invoicing requirements in Peru
Peru introduced e-invoicing in 2010, though it became compulsory in the country years later. Taxpayers must issue and receive electronic invoices, and meet certain requirements along the way:
Recipients must generate an acknowledge of receipt for received e-invoices
Electronic invoices must be issued for both B2B and B2G transactions
The invoices themselves have stringent rules – such as needing to be in UBL 2.1 format and archived for at least five years – and require information such as:
Invoice data and reference number
Supplier name, address, contact details, tax ID
Description of goods and/or services (quantity, price, unit of measure)
Failing to meet VAT obligations in Peru may lead to penalties.
For example, failing to declare taxable sales can result in a fine that amounts to 50% of the VAT amount that is due – plus monthly interest of 1.2%. There are other reasons in which a taxpayer may be penalised, so compliance is vital.
There are certain supplies in Peru that are eligible for withholding VAT, of 4%, 10% or 12%. Taxpayers are required to split the withheld VAT and remit it to a special account with the nation’s bank.
Yes, non-residents who have purchased and consumed goods or services subject to authorised VAT in Peru can file requests to recover VAT. It will be refunded at the time of the non-residents’ departure.
Businesses looking to register for VAT in Peru must submit specific documents through a local fiscal representative that is registered with the country’s tax authorities.
Registered businesses in Peru must obtain a unique tax identification number, known as ‘Registro Unico de Contribuyente’. This number is necessary for VAT but also applies to other taxes.
Peru dictates that VAT is due at the time of the goods or services having been supplied.
Solutions for VAT compliance in Peru
Compliance can be tough when considering there are multiple mandates that may apply, and that rules and regulations evolve over time. Ensuring you meet standards and are current on the state of play can feel like a full-time job.
This is where Sovos shines. We serve as the compliance partner for many organisations, staying on top of the tall task of compliance so they can focus on what truly matters: growing their business. Our one-of-a-kind solutions are matched by our expert team’s local and global tax knowledge, providing true confidence for a regulated world.
Speak to our experts today to start a new chapter in your compliance journey
From managing VAT compliance to familiarising yourself with the VAT registration timelines, Alex Smith, Senior Director of Consulting Services will detail the most critical compliance challenges for companies expanding internationally.
Join Steve Sprague, Chief Product & Strategy Officer at Sovos, for an insightful discussion on how SAP customers can navigate the shift toward SAP’s Clean Core and ensure their tax compliance processes are future-ready. As governments worldwide accelerate the move toward digital tax reporting and real-time compliance mandates, businesses face new challenges in staying compliant while managing complex ERP systems.
In Italy, the insurance premium tax (IPT) code (which is being revised as of the date of this blog’s publication) and various other laws and regulations include provisions for taxes/contributions on motor hull and motor liability insurance policies.
This article covers all you need to know about this specific indirect tax in the country.
Which taxes are payable concerning motor insurance policies in Italy?
In Italy, there are four types of charges payable on motor insurance policies:
Insurance Premium Tax (IPT/RCA)
Contributions to the Solidarity for Victims of Extorsion and Usury (CONSAP)
Contributions to the Emergency Fund (EMER)
Contributions to the Road Accident Victims` Fund (RAVF)
How are the taxes calculated for motor insurance policies in Italy?
Whilst motor insurance policies can include various coverages as add-ons, this blog’s main focus is on motor hull and motor liability.
Motor Hull (Class 3)
Calculating taxes on land vehicles, i.e., motor hulls (Class 3), is simple. There is only IPT at 12.5% and CONSAP at 1%.
The taxable premium is the basis of these taxes. Both taxes are declared in the annual IPT return and payable monthly.
Motor Liability (Class 10)
The taxation of insurance policies against civil liability arising from the circulation of motor vehicles is more complex.
The IPT rate (so called Responsabilità Civile Auto or RCA tax) is determined on a provincial level. Legislative Decree 6 May 2011, No. 68 quotes that the rate of the RCA tax is equal to 12.5%. However, this can be increased or decreased by the province or metropolitan city by a maximum of 3.5%. That is why RCA tax rates are sometimes referred to as a tax with a rate ranging from 9-16%.
In Italy, there are 20 regions, each with one or more autonomous provinces or cities. To complicate matters further, the province or city can modify the tax rates within the tax year.
CONSAP does not apply on motor liability policies, however EMER is at a rate of 10.5% with an additional 2.5% required for RAVF.
RCA and EMER are declared in the annual IPT return, and payments are due monthly.
Although RAVF is also declared annually, the declaration process differs, and there is also a prepayment obligation. The actual amount of RAVF depends on the management fee set annually by the Italian insurance supervisory body (IVASS) – the percentage of which is published during November for the next year.
As previously stated, IPT/RCA regulations are undergoing major renewal (during 2024). The legislation governing the tax provisions on private insurance and life annuities (Law 29 October 1961, No. 1216) is part of the Italian Government`s tax reform initiatives.
According to the available draft legislation, the IPT law will be divided into three parts:
Minor taxes (technical aspects of this tax)
Assessment rules (procedure rules)
Penalty regulations
The government extended the deadline for enactment of the new regulation to the end of 2025.
What vehicles are exempt from tax in Italy?
There are not many exemptions available for IPT/RCA tax, nor for CONSAP, EMER and RAVF. However, cars registered in Italy to NATO Allied Force benefit from an exemption from IPT/RCA.
Global Compliance for Continuous Transaction Controls
Sovos Compliance Network is complete, continuous and connected. We process over 6 billion compliant invoices per year through our Compliance Network, more than 60 times other industry providers.
A core component of our Indirect Tax Suite, Sovos Compliance Network helps you:
Effortlessly map indirect tax compliance requirements with suppliers, buyers and consumers
Ensure your transactional documents adhere to the latest local regulations
Connect seamlessly with the right government agencies and certified platforms
Distribute invoices to trading partners where required
Build the Sovos Compliance Network into every transaction
The solution provides:
B2B & B2G Transaction Compliance
The world’s first complete solution for e-invoicing compliance, including clearance, CTC and global post-audit models.
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“Compliance is now inside the transaction, elevating its importance and driving businesses to look beyond just meeting a minimum threshold. Now, the goal is a global view of compliance with a single source of data that allows them to generate actionable business intelligence”
Kevin Permenter, Research Director IDC
Sovos Compliance Network
Global Coverage
Post Audit and CTC e-invoicing in 65+ countries.
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Tax authorities across Eastern Europe continue to move ahead with SAF-T adoption, with upcoming changes impacting VAT compliance requirements for businesses operating in the region.
In this exclusive webinar, you’ll get in-depth insights on:
– Romania’s SAF-T expansion: The tax authorities will expand the scope of businesses impacted by this requirement to non-established companies from January 2025
– Bulgaria’s SAF-T Introduction (2025): Learn about Bulgaria’s planned adoption of the SAF-T framework and what it means for businesses operating in the region
– Poland’s Extended SAF-T Reporting: Discover how Poland is expanding its SAF-T filing requirements and how this may affect VAT compliance and audits
Join our expert, Clementine Mayor, VAT Consultant as she unpacks the latest developments in VAT reporting across Eastern Europe. Don’t miss this opportunity to understand how these changes will shape the future of VAT audits and prepare your business for compliance.
Italy: IPT Treatment on Used Vehicle Warranty Services
On 21 May 2024, the Italian tax authority published a ruling (No. 110/2024) on the IPT treatment of warranty services provided in relation to the sale of used vehicles.
The ruling dealt with a scenario in which a company (the ‘Applicant’) provided warranty services to dealers within the same company group, with the latter offering these warranties to the purchasers of the vehicles. The Applicant also separately entered into insurance contracts with an insurance company to obtain coverage for the costs it incurred in repairing the vehicles sold when required under the terms of the warranty.
The insurance contract concluded between the Applicant and the insurance company would only be subject to IPT in Italy if the policyholder’s relevant establishment was located in Italy, in line with the location of risk rules.
More significantly, however, the ruling also addressed the warranty services provided by the Applicant to the dealers. For these, the ruling assessed that guarantees such as these do not satisfy the requirements of an insurance contract with an insurance company as the contracting party. The VAT treatment of this arrangement was outside the scope of the ruling, but it was conclusive in outlining that IPT does not apply to such an arrangement.
Comparing this ruling to the position in Germany highlights the possibility of a lack of harmonisation in this area without an EU-wide position.
Read our blog on general matters of IPT in Italy for additional information.
Germany: The Application of IPT rather than VAT to Guarantee Commitments
Following the publication of various circulars by the Federal Ministry of Finance in Germany in 2021, rules on the taxation of guarantee commitments were made effective 1 January 2023. This blog explains how this affects insurers and other suppliers.
Scope of the rules for guarantee commitments
The Ministry of Finance published its initial circular in May 2021. This was in response to a Federal Fiscal Court judgment. It concerned a seller of motor vehicles providing a guarantee to buyers beyond the vehicle’s warranty.
In these circumstances, the circular confirmed that the guarantee is not an ancillary service to vehicle delivery but is deemed to be an insurance benefit. As such, it would attract IPT instead of VAT – unless the guarantee is considered a full maintenance contract.
The circular did not prompt immediate concern within the insurance sector. Markets outside the motor vehicle industry weren’t concerned either. The presumption was that it was limited to the specific context of the motor vehicle industry.
Matters changed the following month. The Ministry of Finance clarified that the tax principles it outlined in fact applied to all industries. As a result, the scope of these rules became potentially limitless in Germany. All guarantees provided as additional products to goods or services sold are now within the scope of the application of IPT.
The clarification could impact industries like those organisations selling electrical items and household appliances.
Effect on insurers and other suppliers
The effect on traditional insurance companies should be relatively limited as they do not usually provide guarantees as part of the sales of goods and services. There could arguably be a significant impact on other suppliers that do provide such guarantees.
First and foremost, there is a potential increase in the cost of providing the guarantees caused by the application of IPT. Unlike input VAT, a supplier cannot deduct IPT from its taxable income – it must either increase prices to compensate or accept a less favourable profit margin.
Any companies that purchase the guarantees cannot reclaim the IPT either, as they can do with VAT. The standard IPT rate of 19% in Germany is high compared to most European countries. This exacerbates these issues.
There are also practical considerations to bear in mind for suppliers obliged to settle IPT with the tax authority. They are presumably required to be registered for IPT purposes like insurers, although the Ministry of Finance has not formally confirmed this.
Perhaps more difficult is the issue of licensing. The Ministry of Finance circulars focus on taxation, leaving it unclear whether other suppliers are now required to obtain a license to write insurance under German regulatory law.
Looking for more information on general IPT matters in Germany? Our German IPT page can help.
Determining and calculating IPT liabilities in various regions can be challenging.
Sovos IPT Determination is a compliance software designed to streamline Insurance Premium Tax (IPT) calculations and ensure accurate tax reporting.
In this webinar, Ramesh Sudhan, Sovos’ Director of Product and Research & Development, will guide you step-by-step through several typical processes supported by the solution.
Brazil VAT Compliance: An Overview for Businesses
Brazil has plenty of tax rules and mandates to consider, but compliance doesn’t have to be strenuous. Knowing your organisation’s obligations and what each requires of you is vital – that’s why this page exists.
This overview guides you through the different taxes in Brazil, from state VAT to federal VAT, municipal service tax and federal social contribution. Compliance starts here.
Due monthly, deadline is dependent on the type of business activities carried out
Federal VAT return
Due on the 15th day of the second month following the month the taxable event(s) occurred
VAT rates
17% 12% 7% 0%
VAT rules in Brazil
There are multiple taxes that organisations in Brazil need to be aware of. Here’s a simple rundown.
Brazil e-invoicing
There are several types of electronic invoices in Brazil, with e-invoicing mandatory for B2G and B2B transactions. If your organisation is established in Brazil, you must issue and receive electronic invoices when dealing with businesses or public administration entities.
Known as ICMS, Brazil’s state VAT is levied by individual states. Each state determines tax rates, though the tax generally applies to:
Imported and national goods
Transportation services between states and municipalities
Communication services
Electricity supply
Federal VAT (IPI)
There are several types of electronic invoices in Brazil, with e-invoicing mandatory for B2G and B2B transactions. If your organisation is established in Brazil, you must issue and receive electronic invoices when dealing with businesses or public administration entities.
Known as ICMS, Brazil’s state VAT is levied by individual states. Each state determines tax rates, though the tax generally applies to:
Imported and national goods
Transportation services between states and municipalities
Communication services
Electricity supply
Federal Social Contribution (PIS-PASEP and COFINS)
PIS-PASEP and COFINS are federal social contributions levied on the monthly gross revenue of organisations. While exports are exempt from these taxes, imports fall under the rules – though tax rates vary based on each organisation’s activities.
Requirements to register for VAT in Brazil
For non-residents of Brazil, the requirements for VAT registration are simple.
Non-resident businesses cannot register for VAT in Brazil without a permanent establishment in the country, and all supplies of goods or services meet the tax threshold for at least two of the four VAT types – meaning registration is necessary for any organisation doing business in Brazil.
However, the country’s tax authorities have yet to implement VAT on cross-border supplies by foreign organisations to consumers who have not registered for VAT (B2C).
Invoicing requirements in Brazil
Generally, any product or service sale must be accompanied by an invoice. Brazil requires businesses to register in a state by joining the National Registry of Legal Entities (CNPJ).
Electronic invoice (NF-e) – for providing goods of service
Electronic service invoice (NFS-e) – for providing services
Electronic consumer invoice (NFC-e) – for B2C transactions
Each invoice requires specific information to be valid, and this includes:
CNPJ number
Address of both the issuer and recipient
Product code, description and quantity
Unit value and tax details
Valid digital signature
In Brazil, an electronic invoice must be presented in structured XML format and validated by the Brazilian tax authorities before it is issued to the buyer.
Penalties for non-compliance with VAT in Brazil
Failing to comply with Brazil’s VAT rules can be costly for taxpayers. There is a dramatic range for fines, ranging from 1% to 150% – though the regular penalty cost is 75% of the tax due to the authorities.
In Brazil, as a rule, for example, there are assumptions of withholding taxes, in the case of the Tax on the Movement of Goods and Services (ICMS), provision in ICMS Agreement 142/2018 and, as for the Tax on Services (ISS), provision in article 6, Complementary Law 116/2003.
There are different deadlines for the two types of VAT in Brazil:
ICMS: These returns are due monthly, with the deadline dependent on the type of business activities carried out
IPI: Returns must be submitted monthly through the DCTF declaration, due by the 15th day of the second month following the month the taxable event(s) occurred
Brazil’s VAT number, Cadastro Nacional de Pessoa Juridica (CNPJ), is a unique identification number assigned to organisations after registering for VAT.
There is no threshold for VAT liability in Brazil. If a business supplies goods or services that are subject to one or more of the country’s taxes, then it must register for VAT.
Solutions for VAT compliance in Brazil
With the numerous taxes in Brazil, compliance can be complicated. Sovos is your ideal compliance partner – not just now, but as the country’s tax rules develop over time.
We combine local tax expertise with global solutions, ensuring compliance wherever you do business. This allows you to focus on what matters.
Complete the form below to speak with one of our e-invoicing experts
Argentina VAT Compliance: An Overview for Businesses
Doing business in Argentina means meeting your tax compliance obligations. Adhering to requirements from multiple mandates, including both VAT and electronic invoicing, can be demanding for organisations.
This page serves as an overview of tax obligations in Argentina, helping you to understand your obligations – both now and as things change in the future.
There’s plenty to know about Argentina’s VAT regime, also known as Impuesto al Valor Agregado (IVA).
Periodic VAT return
Monthly Between the 12th and 22nd of the month following the end of the tax period
VAT rates
21% (standard) 27% 10.5% 2.5%
VAT rules in Argentina
Argentina e-invoicing
Currently, if the taxpayer is unable to issue the receipts outside the electronic issuance system due to force majeure or circumstances beyond their control, they must issue a return on a certain date with the payment receipts, credit notes and debit notes issued without using the Electronic Issuance System (SEE). Read more.
Digital VAT Book
In addition to VAT and e-invoicing, taxpayers should be mindful of another declaration: the Digital VAT Book. Implemented in 2019, this obligation requires organisations to electronically record and register the following:
Sales
Purchases
Assignments
Imports and exports
This regime requires taxpayers to register their operations electronically through the PORTAL IVA service.
Requirements to register for VAT in Argentina
Argentina treats goods and digital services differently when considering VAT.
In June 2018, Argentina introduced a VAT withholding levy on digital services provided to domestic consumers by foreign companies and providers.
Argentina’s General Resolution No. 4240/2018 defines the following to be taxable digital services:
Data storage
Online advertisement
Software as a Service (SaaS)
Streaming music, videos or games
Web services
The resolution requires a deduction equivalent to the standard VAT rate (21%) be withheld from the buyer’s payment, by the payment agent. VAT is levied either:
On debit cards: At the time of the transaction
On credit cards: At the end of the month
Other payment providers: At the point money is transferred
When does VAT liability apply in Argentina?
In Argentina, VAT applies to the sales value of products, most services and the import of goods and services. However, there are some exceptions.
VAT is paid by filing monthly tax returns, and the standard VAT rate is 21%. Certain goods and services qualify for special rates of 27% or 10.5%.
Invoicing requirements in Argentina
The first requirement for issuing electronic invoices in Argentina is that taxpayers must be registered with the AFIP (Administración Federal de Ingresos Públicos) and request an Electronic Authorisation Code (C.A.E.) from the tax authorities.
E-invoices must include a QR code, encompassing identification data and specific details – including:
Issuance data
Invoice number
Total amount
Billing currency and exchange rate
Authorisation type and code
Penalties for non-compliance with VAT in Argentina
Argentina penalises taxpayers who fail to meet their VAT obligations.
For those who fail to pay the VAT they owe, the penalty will be 100% of the amount owed. Those engaging in fraudulent activities may face fines ranging from two to six times the amount of tax owed—and even imprisonment in extreme cases.
Argentina’s VAT withholding regime applies to operations that, by their nature, may give rise to the generation of tax credits, such as the purchase and sale of movable things and the provision of services.
Depending on the operation’s characteristics, withholdings can be 50%, 80% or 100% of the VAT established on the invoice.
When leaving Argentina, taxpayers can visit any customs office to submit their invoices and purchases. Valid invoices will be refunded via stamped forms.
No, non-resident companies are not eligible to receive a VAT refund on their expenses in Argentina. This is even applicable where the non-resident has made zero taxable supplies in the company.
VAT numbers are issued to registered taxpayers, used by the tax authorities to identify and verify natural and legal entities. Argentina’s code is named Clave Única de Identificación Tributaria (CUIT) and typically follows this format: 30-12345678-1.
Solutions for VAT compliance in Argentina
Complying with your tax obligations in Argentina can be taxing on your resources – especially if you run an international organization. There are numerous mandates to consider, and they change over time, so keeping up with your requirements is just as important as meeting them in the present.
This is where Sovos steps in. Blending local expertise with global coverage, Sovos’ solutions and experts can take on your tax burden to ensure you are compliant everywhere you do business. Your compliance is our concern.
Complete the form below to speak with one of our e-invoicing experts
The Government of the Republic of Slovenia has released a draft proposal to implement mandatory e-invoicing and e-reporting for B2B and B2C transactions. This implementation would mark a significant shift in the country’s e-invoicing landscape.
Should the proposal be approved, taxpayers will be subject to a two-fold obligation: they must issue and exchange B2B invoices electronically and report B2B and B2C transactional data to the tax authority. Although clearance will not be required in the e-invoice issuance process, transactional data must be reported to the tax authority in near real-time, which shows that Slovenia is aligning with the global trend of governments implementing Continuous Transaction Controls (CTC).
Taxpayers under scope are all business entities registered in Slovenia’s Business Register (PRS), including companies, self-employed entities and associations. To register in the PRS, business entities must have a registered office or address in the territory of the Republic of Slovenia.
This new system also introduces a decentralised reporting and exchange model facilitated by registered service providers, called e-route providers. These are similar to the network exchange requirements in France and those planned for Spain.
The proposed mandatory e-invoicing and CTC e-reporting will be introduced from 1 June 2026.
E-invoicing requirements
The e-invoicing mandate would require taxpayers to issue, send and receive e-invoices and other e-documents for B2B domestic transactions.
Under the Slovenian proposal, e-invoices refer to an invoice or similar accounting document that records business transactions, regardless of what they are called. This includes credit notes, debit notes, advance invoices, payment requests, etc.
There are multiple supported formats for the exchange of e-invoices:
e-SLOG standard, developed by the Chamber of Commerce of Slovenia, which is compatible with EN16931 and already in use in the B2G sector
European standard EN 16931 for e-invoices, as per Directive 2014/55/EU
Other internationally recognised standards agreed mutually by the parties
The proposal allows three methods for e-invoice issuance and exchange:
E-route providers, which are registered service providers facilitating the issuance and exchange of e-invoices and e-documents.
Direct exchange between the issuer and recipient’s information systems (excluding e-mail transmission)
The authority’s free application for taxpayers with a smaller business volume
In cases where the issuer and recipient use e-invoice different standards, if using e-route providers, the recipient’s provider must convert the e-invoice to the syntax accepted by the recipient.
Regarding B2C transactions, consumers will have the option to receive either e-invoices or paper invoices. This must be agreed upon by the parties. If an e-invoice is issued, suppliers will be obliged to provide a visualised content version (e.g., PDF).
CTC e-reporting requirements
The proposal states that taxpayers must electronically report B2B and B2C transactional data, including cross-border transactions, to the Financial Administration of the Republic of Slovenia (FURS) within eight days of invoice issuance or receipt. Reporting must be done exclusively in the e-SLOG standard.
The reporting requirement extends to B2C and cross-border transactions, regardless of whether an invoice was issued electronically. This ensures that transactions such as these, for which e-invoicing is not mandatory, are reported to the FURS allowing it a comprehensive collection of taxpayers’ transactional data.
The selected method for e-invoice exchange will impact the e-reporting of transactional data. If the parties use e-route providers, both the issuer’s and recipient’s providers must send the e-invoice to FURS. For direct exchanges, both parties must separately report their transactions to FURS.
E-route provider requirements
The draft establishes obligations and certain technical requirements applicable to e-route providers. According to the Slovenian government, the requirements to become an e-route provider are comparable to those in France but without the need for certification
However, the public authorities will maintain a list of registered e-route service providers who must fulfil certain requirements, some of which are already listed in the draft law. The proposal does not state explicit local registration/establishment rules for e-route providers. The government will publish further regulations detailing the application process and other applicable requirements.
Next steps
The government must take certain crucial steps before enforcing the mandate. The Parliament must officially approve the draft law before the requirements are confirmed.
Moreover, publication of the technical specifications and further regulations are awaited, including details of the data reporting methods to the tax authority. Slovenia will need to apply for a derogation from the VAT Directive with the EU Commission to enforce mandatory B2B e-invoicing before the adoption of ViDA (VAT in the Digital Age).
For businesses operating in Slovenia, this will mean impactful changes to their outbound and inbound processes by 1 June 2026. This includes the acquisition of software or update of their systems to issue, send and receive e-invoices, adapting to the allowed e-invoicing formats and connecting to the FURS or availing the services of e-route providers to electronically report their data.
Have questions about how these changes could affect your operations? Ask our team of experts.
Stay informed with the latest updates from the European Commission’s VAT in the Digital Age (ViDA) on the three pillars:
* The real-time digital reporting system based on e-invoicing
* New VAT rules for the platform economy
* Single VAT registration for businesses selling to consumers across the EU
The webinar will also cover essential VAT recovery claims, highlighting the differences between EU VAT Refunds and 13th Directive claims, and guide you through the VAT recovery process.
VAT Compliance in Germany: An Overview for Businesses
Tax compliance in Germany is fragmentary by nature and requires resources to ensure compliance. Consider that compliance for many German taxpayers requires meeting several mandates, and the fact that such regulations are updated often, and you understand the challenge taxpayers have to undertake. From VAT to IPT, multiple moving parts demand precious time and resources.
This page is your overview of all tax compliance obligations across Germany. To keep up with evolving requirements, be sure to bookmark and revisit frequently.
Germany VAT compliance can be resource-heavy to stay on top of due to the many requirements imposed on taxpayers. These include:
Periodic VAT return
Monthly 10th day of the month following the end of the tax period
Quarterly 10th day of the month following the end of the tax period
Annual VAT Return
Annual 31st May of the year following the reporting year
EU Sales and Purchases List
Monthly 25th day of the month following the end of the tax period (for goods once sales pass EUR 100,000 annually)
Quarterly
25th day of the month following the end of the tax period (for services and goods when sales are under EUR 100,000 annually)
Intrastat
Monthly 10th day of the month following the relevant month
VAT rates
19%
7%
0% and Exempt
Intrastat thresholds
Arrivals: EUR 800,000 Dispatches: EUR 500,000
VAT Rules in Germany
Germany e-invoicing
E-invoicing is on its way for all taxpayers in Germany, but complete coverage is not here just yet.
Electronic invoicing is currently divided by transaction type. While there are national and federal requirements for B2G transactions, electronic B2B invoices are still not mandated.
Taxpayers may find Germany’s e-invoicing scheme complicated due to its fragmented status, and the fact that more updates are coming. Our dedicated Germany e-invoicing page can help you to meet your compliance obligations.
Requirements to register for VAT in Germany
Companies established within the EU but outside of Germany typically do not have to register for VAT in the country. However, there are exceptions which would require a foreign business to have to register for VAT – including:
Buying and selling domestically without the goods leaving the country
Holding products in a German warehouse and selling to German customers
Importing into and selling goods in Germany from another EU Member State
Intra-community supplies (moving goods between Germany and other EU Member States)
Organising live events in Germany – whether for art, education or a conference
Selling via an electronic marketplace in Germany
More exceptions and other nuanced situations may require VAT registration in Germany. Contact us for more information.
IPT in Germany
Insurance Premium Tax (IPT) is another tax obligation in Germany to consider.
IPT in Germany is complex, providing numerous elements for insurers, brokers and other applicable parties to track – from rates to law changes. Just a handful of years ago, Germany underwent sweeping Insurance Tax Act reforms that caused uncertainty in the insurance market.
Put simply, Insurance Premium Tax is made up of five key elements. Together, the following determine the tax:
Import VAT, known as Einfuhrumsatzsteuer in Germany, is a unique form of VAT that foreign taxpayers must know. It is charged by the country’s customs authorities when goods are imported into Germany from countries outside the EU.
Companies established outside of EU Member States must pay import VAT in Germany, including when using ports in Bremen and Hamburg. However, foreign taxpayers oftentimes can apply for reimbursement of import VAT they have paid if they register in Germany.
Invoicing requirements in Germany
German VAT invoices have strict requirements to be legally valid. Required invoice contents include:
Issuance date
Unique invoice number
VAT identification number for the supplier
VAT rate(s), VAT amount(s), and total gross amount
Supplier and buyer full addresses
Description of the goods or services (plus quantities if supplying goods)
Total value of the invoice
Details in case of zero VAT, reverse charging, intra-community supply, etc
Registration for OSS in Germany
Cross-border trade in the EU for B2C transactions was simplified with the implementation of the One Stop Shop (OSS) scheme as part of the 2021 EU E-Commerce VAT Package.
To register for OSS in Germany, taxpayers must use the ELSTER.de portal. However, this requires an ELSTER certification, which is given to companies that have registered, paid VAT or submitted a tax return in Germany.
Devised to simplify EU VAT compliance, the VAT Import One Stop Shop (IOSS) consolidates your intra-EU activities into a single VAT return.
Businesses or their local representatives must submit an electronic application to the BZSt to register for IOSS in Germany. Taxpayers who pay VAT must also specify their VAT registration number.
Intrastat is an obligation for particular companies that trade internationally in the European Union. Specifically, it relates to the movement of goods across EU Member States.
Despite their being similar enforcements across the EU, Member States have chosen to implement Intrastat rules differently and they each have their own Intrastat threshold that triggers reporting. In Germany, there is a declaration threshold of EUR 800,000 for arrivals and EUR 500,000 for dispatches in 2024.
Germany issues VAT refunds monthly or quarterly, depending on the business’ filing frequency. The tax authorities transfer the refund to the bank account the business provided when it registered.
The standard VAT rate in Germany is 19%, applying to most goods and services. There’s a reduced rate of 7% for the likes of books, cultural services, medical and dental care.
The VAT registration threshold for taxpayers in Germany is EUR 10,000, providing they haven’t opted to pay VAT in Germany through the EU’s One Stop Shop scheme.
In Germany, VAT is due when the tax point occurs. It can be paid from the day after the end of the reporting period to the due date of the VAT return being paid.
Germany does not require companies outside the EU to appoint a fiscal representative for tax purposes. Businesses can choose whether to appoint a local representative or register directly with the appropriate tax office in Germany.
In Germany, the tax point determines when VAT is due. For goods, it is typically the time of delivery. For services, it is when the service is completed.
The tax office automatically sends a tax ID number to newly registered German addresses within three weeks of registration. It will come via mail; a duplicate can be obtained from the Finanzamt.
The delivery threshold in Germany is EUR 10,000. If a Germany-based supplier delivers goods to a customer in another European company under EUR 10,000, they will pay VAT in Germany as the threshold has not been reached.
How Sovos can help with VAT compliance in Germany
The fragmented aspect of tax compliance in Germany can be demanding on resources, especially when keeping current on future updates and implementations. Sovos is a single vendor with global and local tax expertise that allows you to future-proof your tax compliance.
Choosing Sovos as a partner means choosing to reclaim your time, allowing you to focus on what matters: growing your business.
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As the global e-invoicing landscape continues to shift and develop, our quarterly VAT Snapshot webinar brings you all the details on the key regulatory changes to watch.
Join Dilara Inal and Marta Sowinska from our Regulatory Analysis and Design team for a 30-minute update on the latest developments in e-invoicing regulations across Europe and beyond.
This session will cover:
Estonia: Encouraging the use of e-invoicing
Latvia: Upcoming mandatory B2B and B2G e-invoicing
Germany: Approval of mandatory B2B e-invoicing by the German Parliament, effective from 2025
Israel: Current status of the e-invoicing clearance mandate
Ever-changing Insurance Premium Tax (IPT) rules and regulations can be challenging to keep up with, so staying on top of the latest developments in IPT compliance is key.
Join our insightful webinar where Sovos’ IPT experts Edit Buliczka, James Brown and Jake Thorne will deep dive into the intricacies of remaining compliant in Hungary and discussing the current and the potential future impacts of the climate change to the IPT regulations across Europe and beyond.
Remaining current with the latest regulatory revisions in VAT reporting and SAF-T requirements in Poland. This webinar will deliver a comprehensive overview of recent changes to ensure you thoroughly understand the evolving compliance landscape. Gain valuable insights into essential strategies and best practices for preparing for VAT audits, mitigating risks and avoiding penalties.
The EU Directive for VAT has laid the groundwork for a harmonised VAT system throughout the different Member States. However, the implementation of the EU VAT law within the national jurisdictions still creates a disparity between its application and conditions to be met, specifically regarding some of the intra-EU simplifications to be applicable.
Following a webinar covering regulatory updates alongside key points of the VAT recovery process, this blog aims to shed light on the crucial aspects of VAT recovery – especially fast-approaching deadlines.
Understanding the nuances of VAT recovery applications is essential for businesses seeking to optimise operational costs by recovering VAT incurred in a different country. Let’s explore the fundamental aspects of the VAT recovery process.
The VAT recovery process
Businesses can reclaim VAT incurred during their operations through VAT returns if registered in the country where costs are incurred. However, for those not registered and with no obligation to do as such, alternative routes such as the EU Refund Claim or 13th Directive procedure are available – provided specific criteria are met.
Before initiating a VAT refund claim, companies must carefully evaluate their taxable activities. Failure to identify taxable activity in the relevant country may result in the rejection of the VAT recovery application. In such cases, registering for VAT becomes imperative to facilitate input VAT recovery through VAT returns, subject to each country’s rules regarding retrospective VAT registration.
Recoverable expenses
The range of recoverable expenses varies across countries, encompassing equipment, tooling, event costs, professional fees, accommodation and so on. However, due to varying regulations, conducting a comprehensive recoverability assessment based on each country’s VAT legislation is crucial before applying.
Meeting deadlines
Adhering to deadlines is critical for successful VAT recovery.
EU businesses seeking VAT refunds from other Member States must submit an EU Refund Directive application by 30 September of the subsequent calendar year. Non-EU businesses aiming to reclaim VAT incurred in EU Member States should file a 13th Directive application by 30 June of the following year.
While some countries share a common deadline of 30 September, missing deadlines may restrict refund requests. Notably, even though in most cases, these deadlines cannot be extended, there are countries like the Netherlands where refund requests can be submitted to tax authorities up to five years back rather than just for the previous fiscal year.
Understanding reciprocity
Reciprocity agreements are pivotal in VAT refund claims, with most EU Member States mandating reciprocity. Understanding these laws is essential to avoid failed attempts at reclaiming VAT in non-reciprocal jurisdictions.
Recent updates include the UK-Italy agreement under the 13th VAT Directive, streamlining VAT refund claims for UK businesses. Notably, the deadline for a 13th directive application in Italy is September 30th, 2024, for all costs incurred during 2023 (i.e., purchase invoices dated in 2023). This represents a significant advancement toward streamlined cross-border VAT recovery processes for UK businesses. Additionally, it may be advantageous for businesses to revisit already submitted 13th Directive claims in Italy that were previously on hold due to the lack of reciprocity.
In conclusion, mastering the intricacies of VAT recovery empowers businesses to enhance financial efficiency and mitigate costs effectively. By navigating the essentials outlined above, businesses can embark on a journey toward unlocking their full VAT recovery potential.
