VAT on supplies and services abroad

Supplies of goods (for example, paintings, photo prints, sculptures) and miscellaneous services (such as a performance as a dancer or actor/actress) that an entrepreneur performs domestically for a fee and as part of his/her business activities are subject to VAT.  

In 2010/2011, fundamentally new regulations have been adopted at the EU level regarding cross-border supplies and services. Which regulation applies in each case depends on whether the supply/service is sold to a business or a private individual. In addition, there are special rules, for example, for certain activities of performing artists. Three principles are distinguished in this context: the “Empfängerortprinzip” (English: place-of-supply principle), the “Unternehmenssitzprinzip” (English: registered-place-of-business principle), and the “Tätigkeitsortprinzip” (place-of-performance principle). 

The place-of-supply principle (§ 3a Abs. 2 UStG) applies if a business supplies goods to a business; thus the term Business to Business, B2B. No German VAT must be charged in this case. 

The registered-place-of-business principle (§ 3a Abs. 1 UStG) applies to supplies and services rendered to private individuals abroad (Business to Consumer, B2C). If the artist is based in the Federal Republic of Germany, he/she must charge German VAT

The place-of-performance principle applies to certain artistic activities (for example, in the areas of music, directing, or presenting) provided to private individuals abroad (§ 3a Abs. 3 Nr. 3a UStG).

When engaging in cross-border activities, artists must therefore find out whether their customer purchases the good or service as a business or a private individual. Moreover, it can make a difference whether the customer is based in an EU member state or a country outside the EU

The valid national VAT rates apply to taxation abroad. The tax rates for the EU member countries can be found under the following link: www.ec.europa.eu

 Please note: 

The question of VAT payment can be neglected if the supplying artist is subject to the regulation for small businesses (see exception: “Kleinunternehmerregelung” (English: small business regulation)).