How to get a German tax number?
You will get/need a German tax number if you:
- are an employee, retired or just have capital and/or rental income
- have self-employed income
- are a partnership (Personengesellschaft)
- are a capital company (Kapitalgesellschaft)
- are a non-German EU business (no matter whether you’re self-employed, a partnership or a capital company) that charges 19% German VAT on all products sold to German private customers since you either:
– deliver goods worth more than 100,000€/year (Lieferschwelle §3c (3) Nr. 1 UStG) to German private customers, or
– you chose to do so because otherwise you would have to charge your own EU country’s higher VAT rate, which would make you uncompetitive in the German market
German tax number: employee, retired, capital/rental income
All German residents, no matter their nationality, get assigned a permanent tax ID (Steuer-ID = Steueridentifikationsnummer), i.e. this stays the same all your life. It has 11 digits, and will look like this: 12 345 678 901.
If a child is born in Germany, the parents get sent the child’s Steuer-ID automatically in a letter a few weeks after birth. People who move to Germany get that letter sent to their official address, i.e. the address at which they registered after about 6 weeks.
On top of that, you will get assigned a tax number (Steuernummer) by your local Finanzamt with your first income tax return.
This Steuernummer will change if you move to a different city.
For example, if you’re an employee who lives in Munich and your surname is Berger, your Steuernummer will look like this: 181/397/12345.
181 through to 185 are the codes of the Munich Finanzamt for people who are employees/retired/have capital and/or rental income
German tax number for your business, if you are:
- a partnership
- a capital company
- an EU business that delivers goods to German private customers
Tax number (Steuernummer)
Before you start being self-employed, or your partnership or capital company starts its activity, you’re supposed to register with your local Finanzamt and apply for a tax number for your business (Steuernummer).
What does the Steuernummer look like?
- if you’re a capital company, e.g. Berger UG or Berger GmbH in Munich, your tax number will look like this: 143/120/12345.
143 is the code of the Munich Finanzamt for corporations.
- if you’re self-employed in Munich and your surname is Berger, it will look like this: 144/140/12345.
144 through to 148 are the codes of the Munich Finanzamt for people who are self-employed or for partnerships.
This Steuernummer will be used to file all your different tax returns, i.e. it gets used for all tax types.
VAT ID (Umsatzsteueridentifikationsnummer)
When applying for a Steuernummer, you can also apply for an additional VAT ID (USt-ID = Umsatzsteueridentifikationsnummer) which stays the same even if you move your business to another city.
It starts with DE and looks like this: DE191623575 (that’s my VAT ID).
At the moment, the VAT ID is only used for cross-border business, i.e.:
- if you provide services to another EU business, as proof that you are a business, or
- if you buy goods from another EU business.
If you don’t apply to get a VAT ID right off the bat when you register your business, you can still do so later on, but once you’re actually in a situation to need one, the waiting time will seem much longer to you…
So best to get it right at the start.
In all invoices you write, you have to mention either your business’ Steuernummer or your VAT ID, and most businesses choose to mention their VAT ID over of their Steuernummer.
It is also planned that all businesses will get assigned a permanent business ID (Wirtschafts-ID = Wirtschaftsidentifikationsnummer) that will stay the same no matter where to in Germany your business moves and that will start with the letters DE (§139c AO).
Yep, that’s also the description of the VAT ID.
So any business that already has a VAT ID will simply get assigned their VAT ID as their business ID.
Which is another reason to apply for a VAT ID, even if you may not need one right away.
Contrary to popular belief, having a VAT ID does not mean that you have to charge VAT yourself.
If you’re not VAT-charging, having the VAT ID just means that if you buy goods from another EU country that has a higher VAT rate than Germany (which applies to nearly all EU countries), you will only end up paying the German VAT rate of 19% on them, so you will save some money.
What kind of self-employed are you?
In the application form (Fragebogen zur steuerlichen Erfassung, it’s an 8-page form) the Finanzamt asks for a lot of details, in order to correctly set your income/corporation tax pre-payments and to classify your activity as either freiberuflich or gewerblich:
- freiberuflich: a privileged class of professions that’s listed in §18 (1) EStG and that usually necessitate having a university degree in that subject, e.g. engineer, architect, medical doctor, dentist, veterinarian, lawyer, teacher, artist (musician, actor, sculptor, …), author, journalist, translator.
A programmer can be freiberuflich if he/she has an university degree in that area and performs specialised, one-off, engineer-like work (so if you programmed a mass-market app that you sell, you’re not a Freiberufler but a Gewerbetreibender).
If you don’t have a university degree, you can prove knowledge equivalent to such a university degree (but convincing the Finanzamt of that equivalent knowledge will be an uphill struggle).
- gewerblich: any activity that’s not freiberuflich. So, for example, if you are a trader, non-Freiberufler programmer, plumber, hairdresser, and so on.
The advantage to being classified as freiberuflich is that you will not pay an additional trade tax called Gewerbesteuer.
If you’re a partnership and all partners are Freiberufler and your activity is also freiberuflich, that partnership is also freiberuflich and you will not pay Gewerbesteuer.
If you’re a capital company, you will be classified as gewerblich regardless of your activity, because the law §2 (2) GewStG lays it down that way.
I offer two flat rate package deals:
- standard “Start your own business” package at 100€ + 19% VAT which includes applying for your business Steuernummer and VAT ID, and
- deluxe “Start your own business” package at 250€ + 19% VAT, which is the above standard package plus 2 hours of consultation with me (by e-mail or by phone).
If you become a client, what you paid for the “Start your own business” package will reduce your next invoice, i.e. you will get a fee rebate.
For details, please see the “Cost” page.