Country Spotlight: Reclaiming Foreign VAT in Germany

Germany is the economic powerhouse of Europe and a primary destination for international business travel, trade shows, and corporate expansion. For businesses headquartered elsewhere, that means significant spend on German soil. Germany's VAT recovery system is one of the most structured in the EU, offering substantial opportunities for foreign businesses to reclaim the 19% standard VAT rate on a wide range of expenses.

Success in the German system requires strict adherence to local documentation rules and an understanding of recent legislative changes about what a non-resident business can actually claim back.

What is recoverable for foreign businesses in Germany?

Germany allows recovery of input VAT on expenses strictly related to cross-border business operations. Common recoverable categories for foreign entities include:

• Accommodation and travel: Hotel stays, car rentals, fuel, public transport, and taxi fares incurred by your travelling employees.
• Events and conferences: Registration fees, booth rentals, and associated marketing materials for trade shows held in Germany.
• Professional services: Legal, consulting, and accounting fees incurred from German providers by your foreign headquarters.

The restaurant rules

Germany is notably accommodating on business meals for travelling teams, provided they serve a clear business purpose. The invoice must meet strict formatting requirements, including a detailed list of attendees and the specific reason for the meeting. Crucially, as of January 1, 2026, the German government permanently reduced the VAT rate on food served in restaurants and catering from the standard 19% to the reduced rate of 7% (beverages remain taxed at 19%). This changes the calculation for your refund claims.

The entertainment restriction

While business meals are recoverable, Germany draws a hard line at client entertainment that lacks a direct, provable business outcome. Expenses for sporting events, theater tickets, or general hospitality incurred by your travelling team are typically denied.

Deadlines and reciprocity for non-residents

Because you are claiming VAT from a country where you are not established, specific deadlines apply. Businesses established within the EU but outside Germany submit via the 8th Directive portal of their home country, with a strict deadline of September 30th of the year following the expense. Non-EU businesses claim directly from the German authority instead, with a deadline of June 30th. Germany also strictly enforces reciprocity: a non-EU business, such as a US company, can only recover German VAT if its home country offers similar privileges to German businesses.