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The Guide

Basics of VAT in Germany


VAT could also be called end consumer tax (or: private consumption tax), because the government only wishes to charge private end consumers, i.e. the buyer of a product/a service. If, for example, an artist liable to VAT buys a folder at a store, he/she only needs to pay the tax if he/she purchases said folder as a private individual. The government does not intend to apply VAT to goods and services purchased in a professional context. It would be too complicated, however, to collect the tax from private consumers. Therefore, the state collects the tax not from the artist but the seller. Accordingly, in addition to the total, the receipt also shows the underlying net price and the corresponding VAT. When making the purchase, the artist initially pays the VAT and the seller forwards it to the tax authorities.

If the artist uses the folder for private purposes, he/she winds up paying the VAT for the item. If he/she purchases the folder for professional reasons, however, the tax office reimburses the VAT (which, as we have learned, is listed on the receipt).   

VAT is thus based on two main principles: 

  1. VAT is intended to tax only private consumption, not consumption in a professional or business context.
  2. Anyone – whether a private individual or business – must initially pay VAT. A VAT-registered business owner will later be reimbursed by the tax office. 

A German gallery owner sells a painting to a private customer for 2,000 euros. This amount includes a VAT of approximately 130 euros (at the current reduced VAT rate of 7% in Germany). The gallery owner must pay the 130 euros to the tax office, thus leaving him/her with a (net) revenue of 1,870 euros. He/She must then pay a share to the artists – let us say they had agreed on half of the net price, i.e. half of 1,870 euros = 935 euros. At the end of the day, the gallery owner's income from the sale is 935 euros (liable to income tax). Since the customer was a private individual, he/she pays 2,000 euros.

If the customer had bought the photograph for professional reasons, for example for his/her shop or law firm, the purchase would have qualified as a business transaction and the buyer would have been reimbursed for the VAT paid.

Conversely, for the selling artist (provided that he/she is subject to VAT) this would mean that the VAT must be added to the sales price on his/her invoice as a seller, which the artist must then collect from the customer (the gallery owner), and pay to the tax office. Professional artists (i.e. not amateurs practicing the trade as a hobby) thus find themselves in a dual role, just like all other business owners: For their sales, they must calculate the VAT, collect it, and pay it to the tax office; for their professional purchases, however, artists initially pay the VAT to the seller, but are later reimbursed by the tax office.

The artist receives his share of 935 euros for the painting. Since the work is then sold to the gallery, he/she must add VAT to the net amount of 935 euros, in this case 7%, equaling 65.45 euros. The artist thus issues the gallery a bill for 935 euros + 65.45 euros = 1000.45 euros and forwards the 65.45 euros to the tax office.


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Many artists and creatives do not see themselves as entrepreneurs. This self-perception can become expensive, among others because of VAT liability. A person who regularly appears as a seller (for example, of his/her own design objects or art works) or participates in business dealings involving services, or who tries to sell services is an entrepreneur. 

Important: Artists and creative professionals, like all other entrepreneurs, are responsible for the VAT to be collected. They must therefore closely monitor whether, when and in what amount VAT is to be charged and paid.


The following points must be checked when determining whether VAT is payable. This checklist applies to transactions whose place of performance is in Germany.

  1. Was turnover generated or is it a pass-through item or a true grant ("echte Zuwendung")? 
  2. Does an exemption from VAT apply in accordance with Section § 4 UStG (Value Added Tax Act)?
  3. Is the service provider a small business owner?
  4. If the turnover is taxable, then the question of the VAT rate arises.

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Has turnover been generated?

Only those services provided for a fee in accordance with Section 1 (1) UStG are subject to VAT. An exchange of services is therefore required for VAT to apply. No exchange of services occurs if the transaction concerns a pass-through item or a true grant. 

True grant

If the payments are intended to incentivise the recipient to act in the grantor's general interest, they are not taxable because no services are exchanged. 

An independent theatre group from Berlin receives production funding from the Berlin Senate Department of Culture. The funds are to be used to implement the theatre production as described in the grant application. The theatre group is not providing a service in exchange for the state of Berlin's funding, but is instead only bound by the General Auxiliary Conditions for Grants for the Promotion of Projects (AnBestP) and must submit proof of use. As a result, no VAT must be paid on the funding received. This constitutes a "true" grant. 

A municipality in Brandenburg has commissioned a theatre group to develop and perform a performance for a celebration commemorating a former mayor. Although the municipality's cultural office is covering the costs, the theatre group is entering into an exchange of services with the municipality because the performance is being created specifically for its benefit. This is a "non-true" grant, and the fee is therefore generally not exempt from VAT. 

See also: Kanzlei Laaser - Wann kommt eine Umsatzsteuerpflicht bei Geldern der öffentlichen Hand in der Freien Theaterszene in Betracht? (in German only).

Pass-through items

Pass-through items are not included in the taxable base under German law, as specified in Section 10 (1) sentence 5 UStG. This means that no VAT is incurred for pass-through items. Pass-through items are amounts that a company receives and spends on behalf of another. These amounts should be recorded as pass-through items. For instance, if a group needs to pass on hotel costs to the theatre as a pass-through item, the invoice should be made out to the theatre as the invoice recipient. In practice, the group submits to the theatre the original invoice addressed to the theatre along with a reimbursement receipt. This reimbursement amount is then not part of the taxable amount and should not be included on the group's invoice or become part of the taxable amount in accordance with Section 13b UStG. 

Domestic invoices or receipts without a specified invoice recipient and a maximum gross invoice amount of 250 euros (Kleinbetragsrechnung, simplified invoice) can be recorded as pass-through items (e.g., supermarket/hardware store purchase). Recommendation: These invoices are best paid in cash. 

A theatre commissions a stage designer to create a design for a stage set. The theatre requests that the stage designer, who lives near a hardware store, procure materials for a maximum of 250 euros, which the stage designer pays for in cash. The theatre later reimburses her for the material costs upon submission of the receipt. This is considered a pass-through item since the stage designer purchased the materials on behalf of the theatre.

A theatre commissions a stage designer to create a design for a stage set. The stage designer lives near an electronics store. The theatre requires a projector for the stage design, which costs over 250 euros gross. When purchasing the projector, she must provide the electronics store with the address of the theatre, and this address must appear on the invoice issued. The stage designer purchased the projector on behalf of the theatre, making it a pass-through item. 

A stage designer based in Germany and subject to VAT is reimbursed for material costs by a theatre group. The theatre group commissions her to design and create the stage set as a complete service. The parties agree that 10% of the fee is the cost of materials, which must be documented with invoice copies. This is not a pass-through item. It is an ancillary service that must be invoiced and taxed at the VAT rate applied to the main service. 

A theatre group in Germany commissions a costume designer based abroad to design and make costumes for a performance. The costume designer rents a studio for this purpose, and the theatre group covers the rental costs for the studio and pays the costume designer a flat rate for the materials. The rental contract with the studio and the invoices for the materials are addressed to the costume designer. The invoices are not pass-through items since they are issued directly to the costume designer, not the theatre group. Payments for the studio rent and materials budget to the costume designer are considered ancillary services and are part of the taxable base according to Section 13b UStG (reverse charge). 

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Outside the normal taxation of turnover, it must be noted that individual organizers or individual events can be completely exempt from VAT (see § 4 Nr. 20 to Nr. 22b UStG – Kulturförderung (English: Promotion of culture- only available in German)). Among other things, this requires an official certificate of which the invoicing party should request a copy. Under this provision, the services of stage directors and choreographers at theaters, opera houses, music and dance halls, etc. have been exempt since 1st of July 2013.

Section 4 No. 20a UStG Cultural institutions

According to Section 4 No. 20a UStG, the turnover of theatres, orchestras, museums, etc. is exempt from VAT if the responsible state authority certifies that they are performing the same cultural tasks as public theatres, orchestras, museums, etc. In practice, this has the following implications for the theatre sector: 

can be covered by the exemption in accordance with Section 4 No. 20a UStG. In some cases, the state authorities may also issue collective certificates to exempt the turnover of foreign-based artists for a festival, for example. In this case, all performers can be listed on one certificate. 

Film screenings and author readings are not covered by the exemption. 

The exemption under Section 4 No. 20a UStG does not cover stage designers, costume designers, artistic directors or dramaturges. Choreographers and directors who only receive fees for the transfer of rights of use (licensing fees) are also not eligible for the exemption. However, the exemption does apply to mixed services (creation of works and transfer of rights of use). 

Exempt turnover

The turnover generated by the aforementioned persons and groups etc. is exempt, provided it is very closely related to the performance of an activity specified in the exemption. For example, the sale of programme booklets is exempt, but not the sale of drinks.

Please note: Artists with a certificate in accordance with Section 4 No. 20a UStG can only use it to issue VAT-exempt invoices for the services listed in the certificate. Invoices for other services (e.g. fees for workshops, teaching, etc.) cannot be issued without VAT with reference to this exemption. However, these services may be subject to other regulations (e.g. the small business regulation under Section 19 UStG). 

Services invoiced under Section 4 No. 20a UStG are not included in the turnover threshold of the small business regulation.

A stage artist has a certificate in accordance with Section 4 No. 20a UStG for her services as a stage artist (performances). She also works as a voice coach for private clients. As a stage artist, she generated turnover of 19,000 euros in 2023, which she invoiced without VAT with reference to the exemption under Section 4 No. 20a UStG. As a voice coach, she earned a turnover of 5,000 euros in 2023, invoiced without VAT under the small business regulation (Section 19 UStG). Can she continue to operate as a small business owner in 2024?


Reason for the invoice without VAT


Stage artist

Section 4 No. 20a UStG

19,000 euros

Voice coach

Section 19 UStG

5,000 euros



24,000 euros

Outcome: She can continue to apply the small business regulation in 2024, as her turnover as a stage artist is not added to the turnover threshold for the application of the regulation since it was invoiced without VAT under a different regulation (Section 4 No. 20a UStG). Only the turnover invoiced on the basis of Section 19 UStG is relevant in determining whether the small business regulation can continue to be applied the following year. The turnover in this example is 5,000 euros, which is below the threshold of 22,000 euros. 

The VAT rate for the ancillary service is determined by the VAT rate applied to the main service.  

If a stage designer subject to VAT issues an invoice for her services in creating the stage set and also invoices the agreed meal allowance, the VAT rate applied to the meal allowance is based on the VAT rate charged for the stage set (usually 7%).

Remember, withholding tax under Section 50a EStG (Income Tax Act) is subject to different rules. According to Section 50a EStG, the taxable base of a service is divided. For a stage design, 60% of the fee is attributable to the granting of rights and the remaining 40% to the creation of the work, unless otherwise agreed. Only the share of the fee for the granting of rights is subject to withholding tax under Section 50a EStG. 


Both the tax office and the artist can apply for the certificate from the competent state authority. This means that a certificate pursuant to Section 4 No. 20a UStG may be issued against the will of a theatre based on an application by the tax office to the state authority. Accordingly, if the theatre has charged VAT on the turnover and the tax office later determines that the exemption pursuant to Section 4 No. 20a UStG applies, the tax office can reclaim the VAT that was withheld by the theatre. Private institutions that fall under Section 4 No. 20a UStG should apply for a certificate to avoid having to pay back the VAT received over the last four years.

The certificate can be issued retroactively for a period of four years.

The exemption under Section 4 No. 20a UStG cannot be waived. Section 9 UStG specifies which tax exemptions can be waived (rental agreements, small business regulation, etc.). 

Validity of the certificate

The certificate from the state authority can be issued for a limited or unlimited period until revoked. For artists based abroad, the certificate is often only issued for the duration of the relevant events. 

Territorial scope of the certificate

The certificate can be issued for all turnover taxable in Germany. This also applies to artists based in Germany or abroad who perform in Germany for organisers based in Germany, and to artists performing abroad, provided they are doing so for tour organisers based in Germany (in the case of tour organisers based abroad, the turnover would not be taxable in Germany). 

A theatre group from North Rhine-Westphalia is touring the Netherlands and Belgium with an international ensemble. The ensemble includes independent stage artists who reside outside of Germany and have a direct contract with the German theatre group. For these ensemble members based abroad, the theatre group applies for certificates in accordance with Section 4 No. 20a UStG to the competent state authority. The certificates also apply to performances in the Netherlands and Belgium with regard to invoices issued by the ensemble members based abroad to the theatre group in Germany. The "place of performance" for VAT purposes is determined by the location of the service recipient's office. If valid certificates are available, the theatre group, as a service recipient in Germany, is not required to pay VAT. 

Note regarding application

Although applications need not follow any particular form, the following information should be included:

  • the names and addresses of the artists or associations in question and
  • the location and date of the performance;
  • a short biography, list of artistic activities and press releases about the artists in question.

Competent state authority

The competent authority is the state authority of the applicant's place of residence or business. If the applicant is not a resident of Germany, the state authority responsible for applying the reverse charge procedure is the one where the organiser has its registered office. The responsibility for a tour lies with the authority at the place of business of the first organiser/location (websites mostly in German language). 

Mecklenburg-Western Pomerania
Lower Saxony
North Rhine-Westphalia: 
                 District government of Cologne
                 District government of Münster
                 District government of Arnsberg
                 District government of Düsseldorf
                 District government of Detmold


Also for artists based abroad

The certificate can also be requested by artists based abroad.

This applies even if the contractual partner based in Germany does not have a certificate in accordance with Section 4 No. 20a UStG. 

Please note: It is possible that contracts with artists residing in France and Belgium are not concluded directly with the artist, but with an intermediary production or distribution company. In these cases, the certificate pursuant to Section 4 No. 20a UStG can only be issued if the intermediary company can provide evidence that it is a theatre-like institution. This is generally unproblematic in the case of companies or theatre production companies but can be more difficult in the case of intermediary distribution companies that offer invoicing as a service. 

Section 4 No. 20b UStG Concert management companies, event organisers 

According to Section 4 No. 20b UStG, the turnover of event organisers, tour organisers and concert management companies can also be exempt from VAT (usually ticket sales). Agencies, on the other hand, are not covered by Section 4 No. 20b UStG. It is important to distinguish between agencies and concert management companies or tour organisers on a case-by-case basis. 

No certification procedure is required in this case. The organisers and concert management companies receive an exemption by submitting the artists' exemption in accordance with Section 4 No. 20a UStG. 

It is unclear how to proceed if not all artists have their own certificate in accordance with Section 4 No. 20a UStG. 

Section 4 No. 21b UStG Fees of lecturers etc.

According to Section 4 No. 21b UStG, certain services provided by lecturers and teachers at an educational institution may be exempt from VAT. This applies to teaching services that are provided for a university or public general or vocational institution or for a school that has received a certificate in accordance with Section 4 No. 21a, bb UStG. 

If the self-employed teacher teaches at an educational institution within the framework of fixed teaching programmes and curricula for a certain period of time, this is deemed a teaching service for the purposes of the aforementioned provision. This does not apply to a single lecture or workshop, for example.  

The lecturer can provide proof of their tax exemption with a certificate issued by the school (not to be confused with the school's certificate issued by the state authority in accordance with Section 4 No. 21a UStG). In addition to the assurance that the school itself has a certificate in accordance with Section 4 No. 21a UStG, this certificate issued by the school must include the titles of the courses etc. offered by the lecturer. In effect, this is a kind of "pass-through" exemption. This means that lecturers need not apply for a certificate from an authority themselves. Instead, they receive the certificate from the exempt school. 

The exemption pursuant to Section 4 No. 21b UStG also applies to lecturers based abroad. 

Section 4 Nr. 22 UStG Fees for workshops etc. 

Fees for workshops organised by non-profit institutions and associations are exempt from VAT in accordance with Section 4 No. 22 UStG, provided that the proceeds are used mainly (more than 50%) to cover costs or, in the case of cultural events, that the fee takes the form of a participation fee. Participation fees only include fees paid by active participants and do not include admission fees paid by spectators (competition, etc.).

It is not possible to request a certificate for this exemption provision; the exemption applies directly if the requirements are met.

Section 4 No. 26b UStG Flat rate for volunteer work

Remuneration for volunteer work is not subject to VAT, provided that the remuneration only consists of reimbursement of expenses or appropriate compensation for time lost. The flat rate for volunteer work can only be paid by public corporations or institutions that pursue a charitable, non-profit or religious purpose and have a corresponding certificate of exemption. Commercial businesses are not eligible for this exemption.

The tax authorities consider compensation of up to 50 euros per hour appropriate, provided that the remuneration does not exceed 17,500 euros per year. For the non-public sector, the material connotation depends on the activity not being a self-interested pursuit of gainful employment. In addition, the activity in question must not be the main occupation of the compensation recipient and must be performed for a non-profit organisation.  

An example of such a volunteer activity could be membership of a board that supervises the association's events.

Amateur actors (e.g. pensioners, pupils) perform as part of a theatre group.

A non-profit organisation in Germany invites a full-time self-employed actress from abroad to participate in a play. She receives an expense allowance of up to 50 euros per hour for her participation. However, in this case, the fee is not exempt from VAT since the actress receives the fee as part of her main occupation and her work is based on the motive of self-serving profit. In accordance with Section 13b UStG, the association is liable to pay VAT in Germany (reverse charge) if the actress cannot present a valid certificate in accordance with Section 4 No. 20a UStG (VAT exemption for stage artists).

It should be noted that individual organisers or events may be completely exempt from VAT outside of regular VAT taxation (see Section 4 No. 20 to No. 22b UStG – cultural promotion - in German). This sometimes requires an official certificate, a copy of which should be obtained by the person issuing the invoice. Under this provision, services provided by stage directors and stage choreographers at theatres, opera houses, music and dance theatres, etc. have also been VAT-exempt since 1 July 2013.

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Special rules, the "Kleinunternehmerregelung", apply to so-called small businesses. They may opt to remain outside of the VAT system, unless they declare to the tax office that they waive this right. Total revenue may not exceed 22,000 euros per year.

Revenues that are counted towards the turnover threshold of 22,000 euros per calendar year include the following: 

  • turnover taxable in Germany that is invoiced without VAT with reference to Section 19 (1) UStG,
  • services that are purchased from abroad and for which VAT is payable in Germany using the reverse charge procedure.

Revenues that are not counted towards the turnover threshold include the following: 

  • turnover that is not taxable in Germany but is taxable abroad, 
  • true grants,
  • wages, 
  • profit distributions from/participations in civil law partnerships (GbR),
  • turnover that is exempt from VAT in Germany in accordance with Section 4 UStG. 

The turnover threshold of 22,000 euros applies to the calendar year. If the self-employed activity is registered in the current year, the threshold for the year of registration is proportionally lower. 

If the turnover threshold is reached in the current year and the expected turnover is not higher than 50,000 euros, there will be no change for the current year. Therefore, it is possible to continue issuing invoices without VAT until the end of the year. Starting from 1 January of the following year, the tax office must be contacted, and invoices must include VAT

All self-employed activities are subject to the same turnover threshold which applies to the person, not the number of registered activities or tax numbers. 

Using this regulation has the benefit that it is not necessary to add VAT to domestic invoices. This is particularly advantageous if you work primarily for private clients (for example, in case of sales to private collectors or performances at weddings), or if you provide services to certain public entities or associations that are exempt from VAT. These clients would otherwise pay VAT without being reimbursed by the tax office. For customers making purchases in a professional capacity, it is irrelevant whether they are charged VAT or not, as they can later be reimbursed. 

The downside: Even in case of work-related purchases, exempt artists and creatives are not reimbursed for the VAT they have paid, because they are not entitled to input tax deduction. Whether the exemption is worth it or not depends on the customer structure and the planned expenditures.

The ZDF (translator’s note: German TV channel) is looking for a director for one day for a recording. The budget amounts to 2,000 euros. Director A is a small business owner according to the above definition and may invoice the 2,000 euros without adding VAT and keep the full amount. Director B is not a small business owner and must pay about 131 euros VAT (7%) to the tax office. He/She therefore only earns a net amount of 1,869 euros. Director A may thus offer his/her services cheaper than Director B or pocket a higher net amount.   


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VAT rate

Which tax rate is applicable – the standard tax rate of 19% or the reduced tax rate of 7% (Section 12 (2) UStG - in German)? 

Annex 2 to the aforementioned Section 12 (2) UStG (in German) contains a list of goods that are subject to the reduced tax rate

For services, the reduced tax rate applies, among other things, to:

  • Section 12 (2) No. 7a UStG admission tickets for theatres, concerts, museums and similar performances by performing artists. 
  • Section 12 (2) No. 7c UStG for the granting of rights under the Copyright Act.

This means that not all "artistic" services are automatically subject to the reduced VAT rate. Only specific services such as ticket sales, certain performance fees, fees for the transfer of rights of use and the creation of works in the field of visual arts are eligible for the reduced rate. 

It is therefore necessary to check individually for each service whether the reduced rate applies. This can be difficult in some cases. Section 12.5 of the VAT Application Decree (in German) provides detailed information on this topic for services in the arts sector. 

Services subject to the reduced rate include: 

  • fees for performances, concerts (including those in the pop and rock genres) and creative DJ sets (including those at techno events) that take place in an artistic context (Section 12 (2) No. 7a UStG),
  • ticket sales (admission tickets) for performances and concerts in an artistic context (Section 12 (2) No. 7a UStG),
  • fees for creating and using copyrighted works (texts, designs, costume and stage designs, choreographies, plays, compositions, etc.) if the use of these works (transfer of rights of use) constitutes the main service (Section 12 (2) No. 7c UStG).

Services not subject to the reduced rate include:

  • fees for performances that take place in a private or commercial context (wedding, birthday, trade fair) or where the performance is not the central element of the event (e.g. performance in a restaurant or at a sporting event), 
  • fees for sound engineers, lighting technicians, make-up artists, prompters, cutters, camera operators, 
  • fees for costume and stage designers if the creation of the work is the main service rather than the transfer of rights of use, 
  • fees for directors who do not have a certificate in accordance with Section 4 No. 20a UStG and for whom the rights of use do not predominate in the contract design, 
  • administrative and organisational services (social media support, assistance services, curation),
  • workshops that do not take the form of courses and are not exempt from VAT under Section 4 UStG, 
  • fees for participation in panel discussions and artist talks, 
  • consulting and coaching services.

The VAT rate for the ancillary service is determined by the VAT rate applied to the main service.  

The reimbursement of meal and mileage allowances is an ancillary service to the main service and is thus considered turnover. The reimbursement amount is therefore part of the invoice. The VAT rate applied to these allowances depends on the rate applied to the main service. For instance, if the main service is exempt under Section 4 No. 20a UStG, then the ancillary service is also exempt. If the main service is subject to a VAT rate of 19%, the same rate applies to the ancillary service.

Remember, withholding tax under Section 50a EStG is subject to different rules. According to Section 50a EStG, the taxable base of a service is divided. For a stage design, 60% of the fee is attributable to the granting of rights and the remaining 40% to the creation of the work, unless otherwise agreed. Only the share of the fee for the granting of rights is subject to withholding tax under Section 50a EStG.

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Those liable for VAT participate in the VAT procedure with advance VAT return and input tax deduction. Here, the VAT paid on purchases is subtracted from the invoiced VAT amounts. The remainder is paid to the tax office.

An independent musician has earned a total net amount of 24,000 euros in one year of freelance activity. She properly charged 7% VAT, in the amount of 1,680 euros, on this net sum of 24,000 euros. She spent a total of 3,980 euros on a computer, train tickets, and flights. As shown by the receipts, this sum includes 19% VAT in the amount of 635.46 euros. The net expenditure (i.e. excluding VAT) amounted to only 3,344.54 euros (because 3,344.54 euros + 635.46 euros = 3,980 euros). She therefore has to pay 1,680 euros VAT to the tax office and will receive back 635.46 euros input tax. Both amounts can be offset against each other to avoid unnecessary bank transfers. At the end, the musician must therefore pay 1,680 euros - 635.46 euros = 1,044.54 euros to the tax office.

The VAT collected by the musician (as a provider of services) is considered the VAT, while the VAT paid by her in advance is called input VAT. Reimbursement of the input VAT by the tax office is called input tax deduction. The difference between VAT and input tax is the tax payable. This tax must be reported and paid to the tax authorities on a regular basis (annually, quarterly, or even monthly), depending on the amount of revenue. The process used for this is the so-called advance VAT return.

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

The term “supplies” refers to the “procurance of the power of disposition over on object” (cf. § 3 Abs. 1 UStG - in German), for example, the purchase of a photograph or a design object. Miscellaneous services include all transactions that are not supplies.

Three questions need to be addressed if one wants to find out if and how VAT must be charged for sales in Germany:  

  1. Should VAT be charged at all? Is a sale taxable or VAT-exempt? 
  2. If so: Are there any exceptions (VAT exemption)? 
    Certain supplies and services are exempt from VAT according to § 4 UStG (in German) (this, however, usually does not concern the art market).
  3. Which tax rate is to be applied – the standard rate of 19% or the reduced rate of 7% (§ 12 Abs. 2 UStG - in German)? The appendix to § 12 Abs. 2 UStG (in German) contains a list of the items subject to the reduced rate.

The fundamental question for determining VAT liability is that concerning the place where the supplies or miscellaneous services are provided. The case is simple if one sells a good or a service within the Federal Republic of Germany: VAT must be collected unless an exemption applies (for example, as a small business). Matters become more complicated when cross-border supplies and services are concerned

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