Shopify and VAT in Germany: what store owners need to know

You run your own store, for example on Shopify? Then you owe the VAT yourself: 19 percent, or 7 percent reduced (§ 12 UStG). Small business owners are exempt up to €25,000 (previous year) and €100,000 (current year) (§ 19 UStG). Above €10,000 in total, EU distance sales to private customers generally follow the destination country's tax (§ 3c UStG).

Last updated: 27 October 2026

This article explains the tax rules for merchants with their own online store. It does not explain the settings of the store system itself.

In short

You owe the tax: on supplies in Germany, whichever store system you use (§ 1 (1) no. 1 UStG).
EU customers: Above €10,000 in distance sales the destination country generally applies; the OSS is optional (§ 18j UStG).
Non-EU countries: Export supplies are tax-exempt if you prove the conditions (§ 6 UStG).

Do I have to pay VAT as a Shopify merchant?

Yes, if you are an entrepreneur and make supplies in Germany for consideration (§ 1 (1) no. 1 UStG). An entrepreneur is anyone who carries out a commercial or professional activity independently; commercial or professional is any continuing activity to earn income (§ 2 (1) UStG). If you sell goods in your store on a continuing basis to earn income, this applies. You are exempt for all your sales only as a small business owner (see below); individual supplies can be tax-free, for example exports to non-EU countries (§ 4 no. 1 (a) UStG). You file the advance return and annual return with the tax office; how this works in ELSTER is in German advance VAT return (UStVA): filing online.

Which rate applies in the store: 19 or 7 percent?

The tax is 19 percent of the tax base for every taxable supply (§ 12 (1) UStG). It is reduced to seven percent for the supply of the goods listed in Annex 2 to the Act (§ 12 (2) no. 1 UStG). So the product decides which rate applies, not the store. Check Annex 2 before you apply a reduced rate.

What applies to small business owners in my own store?

Your turnover is tax-exempt if total turnover in the previous calendar year did not exceed €25,000 and does not exceed €100,000 in the current calendar year (§ 19 (1) UStG). If you start during the current year, only your total turnover in that year counts, and the limit is €25,000 (section 19.1 (3) UStAE). Then you usually file no advance VAT return, you must not show VAT separately and you have no input VAT deduction (Finanzamt Hessen). When the scheme ends and what a waiver means is in VAT return for a small business in Germany.

What applies to sales to other EU countries? Above €10,000 the destination counts

If you ship goods to private customers in another EU country, this is an intra-Community distance sale. The place of supply is the place where the goods are when transport or dispatch ends (§ 3c (1) UStG). That means the VAT of the destination country applies.

There is an exception for small merchants established in only one member state: if the total of such supplies and certain services to customers in other EU countries did not exceed €10,000 in the previous calendar year and does not exceed it in the current year, paragraph 1 does not apply (§ 3c (4) sentence 1 UStG). You can declare to the tax office that you waive this exception; the declaration binds you for at least two calendar years (§ 3c (4) sentences 2 and 3 UStG). Examples on the threshold: Distance sales and § 3c UStG and The EU VAT OSS threshold of 10,000 euros.

Situation	Result
EU distance sales and certain services: previous year and current year not above €10,000, no waiver	§ 3c (1) UStG does not apply; the destination-country rule does not apply then.
Threshold exceeded	The place of supply is the country where the goods arrive (§ 3c (1) UStG).

How do I declare other EU countries' tax centrally (OSS)?

For distance sales within the Community you can take part in the special procedure (OSS). You notify participation before the start of the tax period from which you use the procedure; entrepreneurs resident in Germany notify the Federal Central Tax Office (§ 18j (1) and (2) UStG). Participation applies uniformly to all EU member states and all supplies under sentence 1. You submit the tax return within one month after the end of each tax period, and the calculated tax is due on the last day of the following month (§ 18j (4) UStG). Step by step: OSS registration in Germany and OSS return for online sellers.

What applies to sales to non-EU countries (exports)?

If your store delivers to a country outside the EU, a tax-exempt export supply may exist (§ 4 no. 1 letter a, § 6 UStG). It exists, for example, if the entrepreneur transported or dispatched the goods to the third-country territory (§ 6 (1) no. 1 UStG). You must prove the conditions (§ 6 (4) UStG). Which taxes arise in the destination country is governed by that country's law.

Which mistakes happen often?

Applying the German rate to all EU customers. If the €10,000 threshold is exceeded, the place of supply is the destination country (§ 3c UStG).
Checking the threshold only for the current year. The exception requires that the previous year was also not above €10,000 (§ 3c (4) UStG).
Applying the reduced rate to all products. It applies only to the goods in Annex 2 (§ 12 (2) no. 1 UStG).
Treating exports as tax-exempt without proof. The conditions must be proven (§ 6 (4) UStG).
Showing VAT as a small business owner. This is not allowed (Finanzamt Hessen).

How VAT GPT helps

If you sell through Amazon or eBay besides your store, VAT GPT helps in three steps:

Upload: You upload your Amazon or eBay CSV reports and your invoices. The AI reads amounts, countries and tax rates.
Check: VAT GPT breaks down the VAT for Germany and the EU (OSS) and prepares the advance return, monthly or quarterly. You check and confirm.
Send: With VAT GPT Pro via ELSTER directly to the tax office.

Everything is in one place: advance VAT return, annual VAT return, OSS return, EÜR, trade tax and income tax returns. There is Free (basic features, free of charge), Go (30 days free with all Pro features) and Pro (€49 per month or €444 per year, each including VAT). Try for Free Now

Frequently asked questions

Do I have to pay VAT with Shopify? Yes, if you are an entrepreneur and make supplies in Germany. Only small business owners within the limits of €25,000 and €100,000, in their first year €25,000, are exempt for all their sales (§ 19 UStG, section 19.1 (3) UStAE); individual supplies such as exports are tax-free (§ 4 no. 1 (a) UStG).

Which rate applies in my store? Generally 19 percent. For the goods in Annex 2 to the UStG, 7 percent applies (§ 12 UStG).

From when do I pay VAT in other EU countries? If, as a merchant established in only one member state, you exceed the €10,000 total or have waived the exception (§ 3c (4) UStG). Then the place of supply is in the destination country.

How do I take part in OSS? If you want to take part in the special procedure, you notify this to the BZSt before the start of the tax period (§ 18j (1) UStG). Participation applies uniformly to all EU member states.

How do I deliver tax-free to a non-EU country? As an export supply (§ 4 no. 1 letter a, § 6 UStG), if the conditions are proven.

Do the rules also apply to other store systems? Yes. VAT follows your supplies, not the software (§ 1 (1) no. 1 UStG).