Germany – German Tax Authorities Define Supply of Goods with Installation or Assembly

Taxable companies established and registered for VAT in an EU country other than France, who supply goods with installation or assembly in Germany, may now be required to register for VAT in Germany.

If this transaction complies with ‘Werklieferungen’. If the “supply” is made by a company established in another EU Member State to a customer established in Germany, the supplier is not obliged to register for VAT in Germany and can benefit from the so-called reverse charge mechanism provided for in Article 194 of the VAT Directive 2006/112/EC.

The supplier invoices without VAT and the customer in Germany is responsible for paying the VAT to the German tax authorities.

The German Federal Ministry of Finance clarified on October 1st 2020 that, when the supplier does not work on any of the customer’s goods, the transaction no longer falls under the concept of “Werklieferungen” allowing the benefit of the so-called reverse charge mechanism.

In these cases the company must register for VAT in Germany and invoice the German customer including German VAT.



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