Value added tax – national and international

Competent advice on VAT returns, input tax deduction and series transactions
Value added tax – national and international

Value added tax on national and international consignments and services

VAT in a tax audit, VAT in the provision of services, transnational services: Hardly any area of taxation is as complex and at the same time as dynamic as turnover taxation. There are many reasons for this: business transactions take place on a daily basis, demands placed on accounting and compliance are high and European directives as well as German laws have a perceivable impact on everyday business life. No wonder the tax authorities take a close look here. That is a good reason to rely on the competence of dhpg's tax experts. We keep an eye on issues relevant to VAT for you and provide you with optimal advice.

What you can expect from us

Why dhpg?

We are "on fire" when it comes to turnover tax

Turnover tax, also known as value added tax, is the most common type of tax in Germany. Hardly any economic transaction can be carried out without triggering it. This is one of the reasons why errors often creep in. Lawmakers deal with this in the guise of a plethora of regulations and audits. The more complex the topic, the more exciting the tasks: At dhpg, there are a host of experts who are passionate about VAT issues. Just get in touch with us.


The right expertise for every case

Real estate taxation, e-commerce, transnational tax issues or VAT for the public sector: as a company with over 600 employees, we have the right VAT expert for you for each of these issues.



As a partner of CLA Global, we have more than 11,000 advisors in 100 countries around the globe. One call suffices to put your transnational VAT issues in good hands.


We don't beat around the bush

Sometimes it's tricky with VAT. We admit that. But our approach is to present the facts in a clear and understandable way and thus make sure you are ready to cope with any VAT stumbling blocks.

Your contact for questions regarding turnover tax

Would you like to get together for a personal meeting? We would be happy to arrange an appointment with you – no commitment necessary on your part – so that we can get to know each other. We look forward to your call or e-mail and to meeting you.

To the contact persons

FAQ - Questions about turnover tax

What to expect in a special VAT audit

Cause and purpose of a special VAT audit

The reason for this is often anomalies in the advance VAT returns submitted, such as repeated corrections or a high input tax backlog. These criteria are how a special VAT audit differ from a comprehensive tax audit:

  • Audit on short notice
  • Audit of shorter periods of time, usually a few months or quarters
  • As a rule, an audit of individual matters (e.g. input tax apportionment in the case of leasing)

Audit order

  • In writing, at least two weeks before the start of the audit
  • Exact specification of the audit period and the substance matter to be audited
  • Right of access to data as in the case of a comprehensive tax audit  
  • Before the audit is ordered, the auditor usually makes an appointment by telephone.
  • After notification of the audit order, a voluntary declaration exempting one from criminal penalties is no longer possible in the case of tax offences   

Execution of a special VAT audit

At the beginning, have an introductory conversation with the auditor and provide him/her with a general overview of the organisation of the company. You should also agree on the details and procedure of the audit.

  • An audit is generally carried out at the company's business premises
  • It is often accompanied by a tour of the company
  • It is also possible for the audit to be conducted in whole or in part in the offices of the government authority

End of the special VAT audit

  • As a rule, by submitting the audit report
  • If there are findings, there is a right to a final discussion

Consequences of the special VAT audit

  • Change in the tax assessment, usually back payments of turnover tax
  • Refunds are also possible in exceptional cases
  • As a rule, no interest accrues, as the audit takes place on short notice
  • The reservation of an audit to be conducted in accordance with § 164 of the German Fiscal Code still applies
  • No bar to amendments under § 173 (2) (1) of the Fiscal Code (AO)
  • Consequence: The amended notices can be amended again at a later date, e.g. through a general tax audit.     

Consequences in the event of major irregularities

  • Extension of the audit period
  • A general tax audit can be ordered
  • In the event of initial suspicion of a tax offence or tax misdemeanour, the auditor may initiate criminal proceedings
  • The investigation may only be continued once the business owner has been notified that criminal proceedings have been initiated
  • Organisational culpability (lack of professional competence or control systems at the company) may be deemed to constitute a tax offence or a tax misdemeanour
  • An internal control system including with regard to compliance with turnover tax regulations (Tax Compliance Management System, Tax CMS for short) can refute the charge of a tax offence
  • The establishment of a Tax CMS is therefore recommended; this is also because undetected VAT errors often extend over long periods of time and add up to high subsequent payment amounts, which additionally lead to high interest charges when corrected retrospectively.

What should I bear in mind with regard to turnover tax for online shops?

First of all, it is important that your sales strategy (sales in other EU countries, with or without a warehouse, via portals such as Amazon, etc.) has a decisive influence on the question of where and how much VAT is due and what it costs to declare it. Furthermore, it should be noted that for deliveries to end customers, the amount of VAT determines your margin. Therefore, you need to take proper account of the consequences of VAT in your actions from the outset.

To ensure correct turnover taxation, you need to have the following information:

  • Delivery location
  • Status of the client (business owner or not)
  • Application of the turnover threshold as well as applicable tax exemptions and tax rates at home and abroad

In addition, you should clarify in good time the form of declaration in other EU countries (registration or low-cost OSS procedure) and who is to perform this (yourself or external service providers).

What is a reverse charge procedure?

The reverse charge procedure is the reversal of liability to pay tax. If certain conditions are met, the recipient of the service rather than the business entity rendering the service must pay VAT to the tax office. If the recipient of the service is entitled to deduct input tax, he or she can at the same time claim a reduction in input tax.

The cases of application extend to both the business sphere and the non-business sphere of the recipient of the service.

Invoices are to be issued without listing VAT and are to state as reference "Tax liability of the recipient of the service".

One therefore needs to act: In the case of incoming invoices, it must be checked whether the reverse charge procedure is to take place. In the case of outgoing invoices, it must be ensured that no VAT is listed on the invoices for which the service recipient is liable for VAT.

The reverse charge procedure primarily covers transactions that lawmakers consider to be prone to tax evasion. The scope of application is subject to continuous expansion by lawmakers

What is a fiscal unity for VAT purposes?

Fiscal unity for VAT purposes is the combination of legally independent companies into one taxable entity. A taxable entity consists of the tax group parent and one or more tax group companies. This is also collectively referred to as the tax group.

The legal consequence of a fiscal unity is that only the tax group parent is regarded as the business owner for VAT purposes. It is obliged to submit consolidated VAT returns for the entire tax group. Services rendered between the tax group parent and the different tax group companies are no longer subject to turnover tax as so-called intercompany sales.

German regulations governing fiscal unity are currently under scrutiny before the European Court of Justice. It is conceivable that previous implementation of these in Germany will be deemed to violate European law.

The tax group parent is often also a holding company. A holding company is usually understood to be a company that holds shares in other companies. For VAT purposes, a further distinction is made between holding companies that are active in business management and so-called financial holding companies, which are limited to holding and managing their investments and are therefore not active in business. Mixed holdings are also frequently to be found in practice. The distinction is particularly important for input tax deduction by the holding company from input services.

What does VAT have to do with the purchase or sale of real estate?

More than some people think. Especially purchases or sales of real estate that take place without any awareness of the complex regulations in VAT law result in unplanned, considerable, and possibly also unnecessary back VAT payments. For example, the tax-free sale of a property can result in input tax adjustments for the seller. However, these can also affect the buyer if the sale is to be considered a sale of a business as a whole. The seller, in turn, can opt for VAT under certain conditions in order to avoid input tax corrections. For the buyer, the question then arises as to whether it wants to do this; because for it this entails risks relating to input tax deduction in the future. These are a host of questions that need to be clarified. To make matters worse, formal requirements prevent subsequent corrections. Remaining risks can be mitigated by appropriate VAT clauses in sales contracts.

Competent turnover tax advice – because it pays to look twice

VAT applies to most transactions in companies' supply and service processes. It is the focus in tax audits or special VAT audits, as there are many stumbling blocks. dhpg offers you specialist expertise in national and international VAT issues, in online trading and e-commerce, in the purchase and sale of real estate, but also with VAT issues relating to the public sector. And our advice is always provided on the bedrock of a comprehensible and pragmatic advisory approach. Just drop us a line.


Get in touch with us

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