Taxation in Germany
April 22, 2024
Summary of important information about the VAT number in Germany
• The responsible tax office, as one of the departments involved in the business registration process in Germany, will automatically be notified of your business registration at the trade office.
• You must apply for a sales tax number when you start your business in Germany and as soon as the business license is available. The reason for this is that you have to correctly record all the financial transactions of your business in the accounts from the beginning.
• Receipt and collection of sales tax is part of a commercial activity. Finally, you must pay it to the tax office by mentioning your requested tax number.
• To obtain a VAT or sales tax identification number, you can submit your application online when registering your business and as part of your tax registration. Another way is to submit your request in writing and directly to the responsible federal tax office.
• VAT number is used in Germany to facilitate trade with other EU member states. Note that the corresponding country code will be placed in front of the numerical sequence.
• The German sales tax law explicitly states that you can use the VAT ID number on your invoices instead of the personal tax number.
• Small businesses in Germany are not required to declare sales tax as long as they do not exceed the limit. It is essential for cross-border trade in the European Union to Obtain a VAT identification number.
December 14, 2025
If you have decided to register a company in Germany, congratulations! However, you should familiarize yourself with the "three minefields of legal, tax, and administrative" on the path to company registration and residency in Germany before signing any document. Not being aware of these points can turn your profits into heavy fines. In this article from Wise Business Group, we will show you how to overcome the hidden fears of registering a company in Germany and start your business with open eyes in the heart of Europe.
July 6, 2026
Starting a Business in Germany at a glance
1. Residency in Germany is not required to start a business or register a company. A suitable visa or residence permit is only necessary to manage the business from Germany.
2. Choosing a legal structure, registering the business, opening a bank account, obtaining permits, registering for taxes, and receiving professional advice are the initial steps to setting up a business in Germany.
3. The most common legal forms for registering a company in Germany include sole proprietorship, limited liability company (GmbH), entrepreneurial company (UG), and partnerships.
4. Mastering basic German language skills is highly effective when doing business in Germany. If you are not fluent, be sure to seek help from a translator or a bilingual advisor.
5. The startup cost varies depending on the type and structure of your business. Allocate funds for business registration, notary services, initial capital, ongoing expenses, and advisory fees.
6. The most prominent industries for investment by foreign entrepreneurs in Germany are technology, renewable energy, healthcare, manufacturing, and e-commerce.
7. Self-employment, freelancer, and investor visas are the most common types of visas for foreign entrepreneurs.
8. Businesses are required to pay various types of taxes, which typically include corporate income tax, trade tax, VAT, and income tax.
9. The time required to register and launch a business in Germany varies. It can range from one week to a month or even longer.
10. Preparing a strong business plan, complying with regulations, proper budgeting, market research, and seeking expert assistance can guarantee your success in starting and running a business in Germany.
