What is Umsatzsteuer?

Umsatzsteuer (or Mehrwertsteuer) is the German term for value-added tax (VAT). VAT is a sales tax levied on the supply of goods and services. The standard rate for Umsatzsteuer in Germany is 19% although this can be as low as 7% for certain products and services.

If you are a freelancer or self-employed worker in Germany, you may be required to charge VAT (Umsatzsteuer) when invoicing clients unless you are classified as a small business owner (Kleinunternehmer). If you are required to charge VAT, you will need to obtain a VAT identification number (Umsatzsteuernummer) from your local tax office (Finanzamt).

Lana Zee