VAT returns in Germany: monthly, quarterly, or not at all

If you charge VAT in Germany, you report it to the tax office (Finanzamt) during the year in a VAT pre-return (Umsatzsteuer-Voranmeldung) and pay the balance by the 10th day after each period. It is monthly if last year's VAT came to more than €9,000, quarterly otherwise, and the Finanzamt can drop it altogether if last year's VAT was €2,000 or less. An extension application buys one more month. The annual VAT return follows the year after. Late filing and late payment each cost extra, and they are charged separately.

1. What a pre-return is, and who files one

A pre-return is a short form in which you work out the VAT for one month or quarter yourself (§ 18(1) UStG): the VAT you charged customers, minus the VAT on your business purchases (input VAT, Vorsteuer), plus any VAT you owe on services bought from abroad. A positive result is paid to the Finanzamt; a negative one is refunded once the Finanzamt agrees, and it may check first (§ 168 AO).

It has to be sent electronically, in practice through ELSTER, the tax authorities' portal, or by your Steuerberater. Paper is allowed only if the Finanzamt agrees, to avoid hardship.

Which period a sale goes into depends on how your VAT is calculated (§ 13 UStG):

• By default, the period in which the work was done or the goods were delivered, whether or not the customer has paid. An advance payment goes into the period in which it arrives.
• On the cash basis (Ist-Versteuerung), the period in which the money arrives. The Finanzamt allows it on application, for instance for businesses with total turnover of up to €800,000 last year and for freelance professionals (Freiberufler) whatever their turnover (§ 20 UStG).

Small businesses using the VAT exemption (Kleinunternehmer) file no pre-returns, except for periods in which they owe VAT on purchases from abroad (the small-business rule).

2. Monthly, quarterly or not at all

The period depends on your VAT for the previous calendar year: what was left to pay for the year after deducting input VAT, not your turnover (§ 18(2) UStG).

These limits apply in 2025 and 2026. Until 2024 they were €7,500 and €1,000, figures that many older articles still quote.

• The exemption is usually granted without an application when the previous year ended with VAT to pay, not a refund. The Finanzamt can refuse it, for instance when this year's VAT is expected to be much higher.
• Choosing monthly after a refund year works by filing the January pre-return by 10 February. The choice binds you for that year.

3. New businesses: the rule that runs out after 2026

The law's basic rule is that a new business files monthly in the year it starts and the year after, whatever the amounts (§ 18(2) sentence 4 UStG). For the years 2021 to 2026 that rule is suspended (sentence 6). New businesses use the same limits as everyone else:

• In the first year, the VAT expected for that year decides. The Finanzamt asks for expected figures when you register (registering as a freelancer).
• In the second year, the first year's actual VAT is scaled up to twelve months. A business that started on 1 October 2025 and owed €2,500 for October to December counts as €10,000 a year, so it files monthly in 2026.

From 2027, as the law stands on 22 October 2026, the suspension ends and the monthly rule applies again. No extension had been passed by that date. On the law's wording, that covers businesses starting in 2027 and, as their second year, 2027 for businesses that started in 2026. Whether the Finanzamt reads it that way, or the suspension is extended, is worth checking before the January return.

Two cases were never suspended: a shelf company that starts trading, and a dormant company that is bought. Both file monthly in the year they start or change hands and the year after (sentence 5). Businesses using the small-business exemption are outside the rule altogether.

4. The 10th: filing and paying on time

The pre-return must reach the Finanzamt, and the VAT must be paid, by the 10th day after the period ends (§ 18(1) UStG). If the 10th is a Saturday, Sunday or public holiday, the deadline moves to the next working day (§ 108(3) AO). The next dates:

Paying: a bank transfer counts on the day the money reaches the Finanzamt's account, not the day you send it (§ 224(2) AO). Up to three days late, no late-payment surcharge is charged; the grace period doesn't apply to payment by cheque or in cash (§ 240(3) AO). With a SEPA direct debit mandate, the payment counts as made on the due date.

The three days are for paying only. There is no grace period for filing.

5. One month more: the Dauerfristverlängerung

On application, the Finanzamt has to extend both the filing and the payment deadline by one month, for every period (§ 46 UStDV). It refuses or withdraws it when the tax seems at risk, for instance when returns or payments come late.

• Applying: electronically, by the date the first pre-return it should cover is due (§ 48 UStDV): by 10 February for monthly filers wanting it from January, by the April due date for quarterly filers. It then stays in place without being renewed.
• Quarterly filers get it without paying anything.
• Monthly filers pay a special prepayment (Sondervorauszahlung) of one eleventh of the previous year's prepayments, every year by 10 February (§ 47 UStDV). With €22,000 of prepayments last year, it is €2,000. A business in its first year bases it on the prepayments it expects.
• It is credited back in the last pre-return of the year, usually December's; anything left over is set against other tax owed or refunded.

So the special prepayment is not an extra tax but money paid early. It does matter for cash flow in February, and it is easy to forget because it has its own return.

6. The annual VAT return

After the year, every business that charges VAT files an annual VAT return (Umsatzsteuererklärung) for the calendar year, electronically. It recalculates the whole year; the pre-returns only paid on account. Any extra VAT is due one month after you file it (§ 18(3), (4) UStG).

The rule behind these dates: seven months after the year ends, or the end of February of the second year after it when a Steuerberater prepares the return (§ 149(2), (3) AO), moved to the next working day where the date falls on a weekend. The Finanzamt can ask for an advisor-prepared return earlier, for example after late returns in the previous year.

The longer advisor deadlines for 2020 to 2024 introduced during the pandemic have ended: the 2024 return was due by 30 April 2026 with an advisor.

7. What being late costs

Paying late costs a late-payment surcharge (Säumniszuschlag) (§ 240 AO):

• 1% for every month or part of a month the payment is late;
• on the amount owed, rounded down to the nearest €50.

€1,240 paid five days late costs 1% of €1,200: €12. Paid 35 days late, it is €24. It is small per month, and it never stops running while the amount is unpaid.

Filing late is charged separately, as a late-filing surcharge (Verspätungszuschlag) (§ 152 AO):

• For a pre-return, the Finanzamt decides the amount, looking at how late, how often, and how much tax. None is charged if you show that the delay was excusable.
• For the annual return, it is 0.25% of the tax still owed after the pre-returns, at least €25, for every month or part of a month. If the return still hasn't been filed 14 months after the year ended, it is charged automatically, unless the tax owed is no more than the pre-returns already paid.
• Either way, at most €25,000.

Not filing at all doesn't make the VAT go away. The Finanzamt estimates your figures (§ 162 AO) and can impose a penalty payment (Zwangsgeld) of up to €25,000 each time to make you file (§ 329 AO). Not paying VAT on time is also an administrative offence (§ 26a UStG), and late returns or payments can cost you the one-month extension.

A mistake found later has to be reported and corrected without delay if it led to too little tax (§ 153 AO), usually with a corrected return for that period.

Letters about missing returns, estimates or surcharges have their own deadlines (a letter from the Finanzamt).

The order that works