Input VAT Deduction after Moving Abroad from Germany: What Entrepreneurs and Landlords Need to Know

Published on 06.10.2026

Input VAT after Moving Abroad

Anyone who moves their residence abroad as a freelancer, sole proprietor or landlord does not thereby leave German VAT behind. Input VAT deduction after moving abroad follows its own rules: German input VAT can continue to arise, but depending on the situation it is claimed either in the general taxation procedure at the tax office or in the input VAT refund procedure (Vorsteuer-Vergütungsverfahren) at the Federal Central Tax Office (Bundeszentralamt für Steuern, BZSt). In addition, there are questions that arise only once: input VAT from winding up the business, assets taken along and investments within the adjustment period under Section 15a of the German VAT Act (Umsatzsteuergesetz, UStG). The income tax consequences of a relocation are covered in our article on business relocation abroad for freelancers and sole proprietors. The following explanations on VAT reflect the legal position as at September 2026.

Emigration Does Not End Entrepreneur Status

Under Section 2 (1) UStG, an entrepreneur is anyone who independently carries on a commercial or professional activity on a sustained basis to generate income. Residence plays no role in this. Anyone who continues their activity from abroad remains an entrepreneur; only the place where their business is established is now abroad. Section 1 (2) sentence 3 UStG also makes clear that residence or a registered office in Germany is irrelevant for the taxation of a domestic supply.

If the activity is discontinued on emigration, entrepreneur status does not end simply upon deregistration with the trade office or the tax office. Under section 2.6 (6) of the VAT Application Decree (Umsatzsteuer-Anwendungserlass, UStAE), it only ceases when all legal relationships connected with the discontinued business have been wound up; the decree is based, among other things, on the Federal Fiscal Court (BFH) judgment of 21 April 1993, XI R 50/90. Services received after discontinuation that serve the winding-up can therefore also entitle the entrepreneur to deduct input VAT.

Double taxation treaties are of no help here. They concern taxes on income and capital and generally do not govern VAT (see our article on double taxation agreements for emigrants).

When Are You Regarded as Established Abroad for VAT Purposes?

Establishment sets the course. Under Section 59 sentence 2 of the German VAT Implementing Ordinance (Umsatzsteuer-Durchführungsverordnung, UStDV), which is largely identical in content to Section 13b (7) UStG, a person is established abroad if they have neither a residence, habitual abode, registered office, place of management nor a permanent establishment in Germany. Two special points are important:

• Anyone who only still has a residence or habitual abode in Germany but runs their business from a registered office or permanent establishment abroad is also regarded as established abroad.
• Anyone who keeps a permanent establishment here from which supplies are made remains established in Germany. The decisive concept is the VAT concept of a fixed establishment. The income tax assessment, for example of a home office as a permanent establishment, is only an indication in this respect.

For the refund procedure, under Section 59 sentence 3 UStDV, establishment in the respective refund period is decisive. You should examine the change of residence for income tax purposes separately; see our article on habitual abode in German tax law. In the case of a GmbH, it is not the shareholder who is the entrepreneur; if only the shareholder moves away, the company remains established in Germany as long as its management is not actually relocated (see our article on moving a company’s registered office abroad).

Which German Input VAT Still Arises after Emigration at All?

After emigration, no German VAT at all arises on many incoming supplies. Under Section 3a (2) UStG, services supplied to an entrepreneur for their business are deemed to be supplied where the recipient runs their business. If the emigrated entrepreneur engages a German tax adviser or an advertising agency, the place of supply is, as a rule, in the new country of establishment, and invoicing is net.

If German VAT is nevertheless shown on the invoice, it is not deductible: Section 15 (1) sentence 1 no. 1 UStG only covers tax that is legally owed. The invoice should be corrected.

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Input VAT Deduction after Emigration: General Procedure or Refund Procedure

There are two routes for entrepreneurs established abroad; the same input VAT may only be taken into account in one of them (Section 62 (1) UStDV).

General taxation procedure. If the entrepreneur continues to make supplies in Germany for which they themselves owe the tax, for example deliveries from a German warehouse or services to private customers with a place of supply in Germany, they file advance returns and annual returns in which they deduct input VAT (Section 16 (2), Section 18 (1) to (4) UStG). Under Section 21 (1) sentence 2 of the German Fiscal Code (AO) in conjunction with Section 1 of the VAT Jurisdiction Ordinance (UStZustV), a central tax office is competent for each country of establishment, for example Kassel for Portugal and Spain, Munich for Austria, Konstanz for Switzerland, Bonn-Innenstadt for the USA and Berlin International for countries not listed. Input VAT must be evidenced here by original invoices (Section 62 (2) UStDV).

Input VAT refund procedure. Under Section 18 (9) UStG in conjunction with Section 59 UStDV, input VAT is to be refunded in the special procedure if, in the refund period, the entrepreneur has not made any taxable supplies in Germany (except tax-exempt supplies under Section 4 no. 3 UStG) or only supplies for which the recipient owes the tax under Section 13b UStG (reverse charge) (Section 59 sentence 1 UStDV). Anyone who, for example, also lets residential property in Germany on a tax-exempt basis remains in the general taxation procedure. Further groups of cases concern certain triangular transactions and supplies declared under the OSS schemes. For advisers who, in Germany, only supply business customers under the reverse charge procedure, the refund procedure is therefore the standard route.

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Under Section 60 UStDV, the refund period covers at least three months and at most one calendar year, and can only be shorter as the remaining period of the year. After an annual or final application, Section 60 sentence 4 UStDV allows one further application for amounts not covered.

On the legal position: Section 18 (9) UStG was amended by the Annual Tax Act 2024 of 2 December 2024 (Federal Law Gazette, BGBl. 2024 I No. 387) and has since also excluded refunds of tax amounts relating to certain tax-exempt export and intra-Community supplies. Section 61a (1) and (2) UStDV was revised with effect from 1 January 2026: entrepreneurs from third countries provide evidence of invoices over 250 euros by uploading them in the BZSt online portal, and decisions are generally made available for data retrieval. Paper procedures, both for the application and for notification, only exist to avoid undue hardship.

On reciprocity, the Federal Ministry of Finance keeps lists of third countries (most recently the BMF circular of 9 November 2022). Anyone who moves to a country without reciprocity generally receives no German input VAT in the refund procedure; exceptions apply to participants in the special OSS schemes, to the extent that the input VAT is connected with the supplies declared there. The list should be checked before the move.

The Year of Emigration: Input VAT before and after the Cut-Off Date

Until emigration, the entrepreneur is established in Germany and deducts input VAT in the advance returns as usual. After that, it depends on whether they continue to have domestic supplies for which they themselves owe the tax. Which route applies to which period should be agreed with the tax office, because the date of moving out under registration law is not necessarily the day on which the place where the business is established moves.

Winding-up costs such as removal services or tax advice for the final returns are of practical importance. To the extent that these services are attributable to the business and German VAT is legally owed, they entitle the entrepreneur to deduct input VAT, even after discontinuation. The German tax number should therefore only be deregistered after a final review that also covers credit notes, advance payments and adjustments under Section 15a UStG.

Discontinuation of the Business, Relocation and Assets Taken Along

• Discontinuation of the business with transfer to private assets: Under Section 3 (1b) sentence 1 no. 1 UStG, the withdrawal is treated as a supply for consideration, provided that the item entitled the entrepreneur to deduct input VAT (Section 3 (1b) sentence 2 UStG). Under Section 10 (4) sentence 1 no. 1 UStG, the taxable amount is the purchase price at the time of withdrawal, which for older equipment is usually a low value.
• Relocation to another EU member state: If business assets are taken along permanently, this constitutes an intra-Community transfer (Section 3 (1a) UStG). It is treated as an intra-Community supply (Section 6a (2) UStG), which is tax-exempt if the requirements there are met; an acquisition arises in the destination country.
• Relocation to a third country: A transfer under Section 3 (1a) UStG is ruled out; import duties are governed by the law of the destination country. For customs issues, see our article on customs and removal goods on emigration.
• Transfer of the entire business: A transfer of a business as a going concern is not taxable under Section 1 (1a) UStG. The adjustment period continues for the acquirer; the seller must provide them with the necessary information (Section 15a (10) UStG).

The disclosure of hidden reserves is a separate income tax issue; see our article on exit taxation of business assets.

Input VAT Adjustment under Section 15a UStG

If, within five years of first use, the circumstances relevant to the input VAT deduction change, the input VAT must be adjusted proportionately, and for real estate within ten years (Section 15a (1) UStG), by one fifth or one tenth per year respectively (Section 15a (5) UStG). A sale or withdrawal before the end of the period also triggers an adjustment if this supply is to be assessed differently from the original use (Section 15a (8) and (9) UStG).

Emigration alone is not such a change. Anyone who continues to use assets abroad for supplies that would be taxable in Germany retains their right to deduct; Section 15 (2) sentence 1 no. 2 UStG only excludes the deduction for supplies abroad that would be tax-exempt in Germany. It becomes critical if the entrepreneur uses the small business exemption in another EU member state (Section 15 (2) sentence 1 no. 3 UStG) or if they sell a building for which they had opted for taxation on a tax-exempt basis or use it privately.

Section 44 UStDV limits the effort involved: no adjustment if the input VAT on the acquisition costs does not exceed 1,000 euros; no adjustment for a year if the circumstances have changed by less than ten percentage points and the amount does not exceed 1,000 euros. In the case of a sale or withdrawal, the adjustment must already be made in the advance return (Section 44 (3) sentence 2 UStDV). When selling a property before the move, income tax also comes into play; see our article on selling German property before emigrating.

Landlords with Property in Germany

The letting of residential property is generally tax-exempt under Section 4 no. 12 UStG; there is then no input VAT deduction, and emigration does not change this. The situation is different for commercial premises for which the landlord has opted for taxation under Section 9 UStG. According to the judgment of the Court of Justice of the European Union (CJEU) of 3 June 2021 (C-931/19, Titanium), a let property without the landlord’s own staff does not constitute a fixed establishment. Accordingly, where the landlord is established abroad, a business tenant owes the tax under Section 13b (2) no. 1 and (5) UStG, and the landlord receives their input VAT from maintenance and management in the refund procedure. This only applies, however, if they do not make any other domestic supplies alongside, such as tax-exempt letting of residential property; if they are established in a third country, reciprocity must also be ensured. The tax authorities, however, have so far treated landlords of German properties with taxable letting as established in Germany under section 13b.11 (2) sentence 2 UStAE. Before switching to net invoices, the treatment should therefore be clarified with the competent tax office; anyone who invoices net without clarification or, conversely, shows tax that they do not owe (Section 14c UStG) risks additional claims. Lease agreements with a VAT clause should be reviewed before the move, as should the question of whether a German fixed establishment does exist after all, for example because of the landlord’s own staff.

Unclear legal position: obtain a binding ruling. Where the tax assessment in Germany is not certain or is foreseeably subject to change, an application to the tax office for a binding ruling (verbindliche Auskunft, Section 89 (2) AO) belongs before implementation. It binds the tax office to the assessment given for a precisely defined set of facts that has not yet been realised, and it is subject to a fee. In our view, a tax adviser who does not recommend this in such a situation is acting irresponsibly: the client risks having to litigate over the outcome years later, and that costs time and money.

Small Businesses since 2025

Since 1 January 2025, Section 19 (1) UStG has been a tax exemption for entrepreneurs established in Germany with a previous year’s turnover of up to 25,000 euros and a turnover in the current year of up to 100,000 euros; input VAT deduction is thereby excluded. After a move to another EU member state, the German exemption can only be obtained via Section 19 (4) UStG: the EU-wide annual turnover may not exceed 100,000 euros in the previous year and in the current year, the German turnover limits of Section 19 (1) UStG must be observed, and the new country of establishment must have issued a small business identification number. The notification procedure under Section 19a UStG concerns the reverse case of an entrepreneur established in Germany. After a move to a third country, there is no small business exemption for German supplies. Anyone who had opted for standard taxation is bound by this for at least five calendar years (Section 19 (3) UStG).

Fiscal Representation: No Route to Input VAT

Under Section 22a (1) UStG, fiscal representation under Sections 22a et seq. UStG is only available to entrepreneurs who make exclusively tax-exempt supplies in Germany and cannot deduct input VAT. It is therefore not relevant for input VAT deduction.

Example (Fictitious): Jonas Moves to Portugal

Jonas is a self-employed IT consultant. With effect from 1 July 2026, he gives up his apartment and office in Germany and continues to run his business from Lisbon. His customers are German GmbHs.

• Until 30 June 2026: Jonas invoices with German VAT and deducts input VAT in the advance returns, including for the removal of his office equipment.
• From 1 July 2026: Under Section 3a (2) UStG, his consulting is taxable in Germany, the customers owe the tax under Section 13b UStG, and Jonas invoices net. He receives the input VAT for the hotel and trade fair admission in Cologne in October 2026 (380 euros in total) in the refund procedure via the Portuguese portal. For the remainder-of-year application, 50 euros is sufficient, and the deadline is 30 September 2027.
• Pitfall: His German tax adviser charges 19 % VAT for the final returns in November 2026. Under Section 3a (2) UStG, the service is supplied in Portugal, the tax is not legally owed and cannot be refunded. Jonas should request a net invoice.
• Laptop: He takes the laptop he bought in January 2025 for 3,000 euros net with him when he moves at the end of June; he declares the intra-Community transfer for the period up to 30 June. If it only took place after the cut-off date, it would be a taxable domestic supply that could call the refund procedure for that period into question. An adjustment under Section 15a UStG is ruled out simply because the input VAT amounted to 570 euros (Section 44 (1) UStDV).

A local adviser should be consulted on taxation in Portugal.

Typical Mistakes in Practice

1. The German tax number is deregistered with the move, even though the winding-up, credit notes or adjustments are still outstanding.
2. Incorrectly charged VAT on B2B services is included in the refund application.
3. The deadline is missed: 30 June for third countries, 30 September for EU member states, in each case for the previous year.
4. Reciprocity with the new third country is not checked.
5. Landlords with commercial premises for which they have opted for taxation do not clarify with the tax office whether, after the move, they must continue to invoice with VAT or net with a reference to the tenant’s liability for the tax.

Organisational and professional law issues are covered in our article Emigrating as a freelancer: legal pitfalls (in German).

Conclusion

Input VAT deduction does not end automatically on emigration; in many cases, only the procedure changes. Anyone who, after the move, only makes reverse charge supplies in Germany receives German input VAT via the refund procedure, with deadlines, minimum amounts and, for third countries, the requirement of reciprocity. Anyone who retains their own domestic supplies remains in the general procedure at a central tax office for their country of establishment. Winding-up, assets taken along and ongoing adjustment periods should be planned in advance; income tax issues such as exit taxation (in German) must be examined separately.

Frequently Asked Questions

Can I still claim German input VAT after moving abroad?

Yes, to the extent that you remain an entrepreneur and the German VAT is legally owed. Without domestic supplies for which you owe the tax yourself, the deduction is made via the refund procedure at the BZSt; otherwise via advance returns at the tax office competent under the UStZustV.

What deadline applies to the refund application?

For entrepreneurs from other EU member states, nine months after the end of the calendar year, that is, by 30 September; for entrepreneurs from third countries, six months, that is, by 30 June of the following year.

Do I also receive input VAT for costs after discontinuing the business?

In principle, yes, if the services serve the winding-up, for example advice on the final returns or costs of selling business assets.

Do I have to repay input VAT if I move abroad?

Not simply because of the move. An adjustment under Section 15a UStG may be required if the use changes within five years, or ten years for real estate, for example through a tax-exempt sale, a withdrawal or a switch to the small business exemption.

Can a fiscal representative help me with input VAT deduction?

No. Fiscal representation under Section 22a UStG is only intended for entrepreneurs who make exclusively tax-exempt supplies in Germany and cannot deduct input VAT.

Attorney Dr. Johannes Fiala and the Munich-based firm, which focuses on tax law, international business law and asset protection, advise entrepreneurs, freelancers and landlords on the tax consequences of moving abroad, from input VAT in the year of emigration to input VAT adjustment. Dr. Fiala has published extensively on questions of emigration and asset protection. Please get in touch with the firm without obligation to discuss your individual situation in an initial consultation.