Set up German taxes in your Shopify store

Germany applies two VAT rates domestically, but the applicable rate and registration requirements change once you sell to customers in other EU countries, depending on your turnover and the type of customer you're selling to.

If you're VAT-registered and sell to both consumers (B2C) and business customers (B2B) across different EU countries, you'll need to configure your tax settings and tax rates correctly to charge the right VAT to every customer.

Sufio, an invoicing app for Shopify stores, uses your tax settings to generate accurate, compliant invoices for every order, so getting these settings right from the start makes bookkeeping much easier down the line.

This article walks you through setting up taxes for a Shopify store based in Germany.

Last updated on July 28, 2026.

In this article, we will discuss

• Tax settings
• Tax rates in Germany and the EU
  • Selling physical goods to customers in Germany
  • Selling physical goods to customers in other EU countries
    • Selling within the micro-business threshold
    • Surpassing the micro-business threshold
    • Country-specific registration
  • Selling digital goods

As a Germany-based store, you can choose how VAT is displayed in your product prices, depending on whether you sell primarily to consumers or to businesses. Shopify offers two options for this.

If you sell primarily to consumers (B2C), or if your country's legislation requires it, you may want to display product prices with VAT included.

To display product prices including VAT while still letting business customers have VAT deducted at checkout:

1. In your Shopify admin, go to Settings → Taxes and duties.
2. In the Global settings section, check Include sales tax in product price and shipping rate.
3. Click Save to apply the changes.

You can also enable dynamic tax inclusion, a Shopify feature that automatically includes or excludes VAT based on the customer's region and adjusts the tax rate accordingly, so you don't need to manage this manually for every market.

To activate dynamic tax inclusion:

1. In your Shopify admin, go to the Settings → Markets and click on the market for which you want to set up tax collection.
2. Click Duties and taxes, then click Edit next to Storefront and checkout pricing.
3. Under Domestic taxes, select Dynamic taxes, then click Done.
4. Click Save to apply the changes.

If most of your customers are businesses (B2B), displaying prices excluding VAT is the more common approach, since B2B buyers typically expect to see net prices before tax.

To display your product prices excluding VAT:

1. In your Shopify admin, go to the Settings → Taxes and duties page.
2. In the Global settings section, uncheck Include sales tax in product price and shipping rate.
3. Click Save to apply the changes.

Optionally, disable the dynamic tax inclusion:

1. In your Shopify admin, go to the Settings → Markets and click on the market for which you want to set up tax collection.
2. Click Duties and taxes, then click Edit next to Storefront and checkout pricing.
3. Under Domestic taxes, select Don't add taxes, then click Done.
4. Click Save to apply the changes.

As of 2026, the standard VAT rate (MwSt, or Mehrwertsteuer) in Germany remains 19%.

Reduced rates of 7% and 0% apply to specific categories, such as food products, e-books, books, newspapers, medical services, and transport charges.

Within the EU, different VAT rates apply to physical and digital goods, depending on your store's taxable turnover.

When selling physical goods to customers in Germany—whether VAT-registered or not—you always charge German VAT.

When selling to non-VAT-registered customers outside Germany but still within the EU, VAT applies. The rate depends on whether your sales exceed the micro-business threshold of €10,000 (excluding VAT).

If you're selling to VAT-registered businesses in other EU countries, you don't charge VAT.

Shopify calculates the correct rate automatically based on the registration type set in your tax settings.

Selling within the micro-business threshold

If your taxable turnover outside Germany, but within the EU, stays below €10,000 (excluding VAT) over a calendar year, you qualify for the micro-business exemption.

Under this scheme, you charge German VAT to all non-VAT-registered customers across the EU, using a single VAT registration for all EU sales.

To use this scheme, apply for the exemption with your local tax authority. Once approved, set up your tax settings in Shopify admin—this only needs to be done once.

To set VAT rates for the micro-business exemption scheme and charge your home country's VAT rate on all orders:

1. In your Shopify admin, go to the Settings → Taxes and duties page.
2. In the Regional settings section, click European Union.
3. In the Collect VAT cross-border section, click Collect VAT.
4. In the Collect across the EU window, select Collect using your home country registration.
5. Select your Country of registration and enter your VAT number. Leave this field blank if you've applied for a VAT number but don't have one yet. You can add it later.
6. Click Collect VAT to save your changes.

Surpassing the micro-business threshold

Once your taxable turnover outside Germany (but within the EU) exceeds €10,000 in a twelve-month period, you must register for VAT in each country you sell to and charge that country's rate.

In practice, this means customers in different EU countries will be charged different VAT rates, ranging from 17% to 27%.

For example, say your business is based in Germany and you sell to consumers in Belgium and France. As long as your combined sales to those two countries stay under €10,000, you simply charge the German VAT rate of 19%.

But once your sales in Belgium alone cross that €10,000 threshold, you're required to register for VAT in both Belgium and France. From that point on, you'd charge 21% Belgian VAT on goods sold in Belgium and 20% French VAT on goods sold in France.

Registering for VAT separately in every EU country you sell to can quickly become time-consuming.

The One-Stop Shop (OSS) Union scheme solves this: you still charge VAT at the rate of the customer's country, but you only need to file one OSS VAT return covering all your EU sales.

To charge your Belgian and French customers the correct VAT rate, set your tax settings accordingly. Shopify lets you select OSS as your VAT registration type, so the right rates are applied automatically.

To set VAT rates for the OSS scheme and charge your customers' shipping-country VAT rate on all orders:

1. In your Shopify admin, go to the Settings → Taxes and duties page.
2. In the Regional settings section, click European Union.
3. In the Collect VAT cross-border section, click Collect VAT.
4. In the Collect across the EU window, select Collect using a One Stop Shop (OSS) registration.
5. Select your Country of OSS registration and enter your VAT number. Leave this field blank if you've applied for a VAT number but don't have one yet—you can add it later.
6. Click Collect VAT to save your changes.

Now, your customers' shipping country VAT rates automatically apply to all EU sales.

Selling with a country-specific registration

Some businesses choose to keep a separate VAT registration for each EU country they ship to.

If that's your situation, you can add a local VAT registration number for any additional country in Shopify, and the correct VAT rate will be applied automatically based on that registration.

To add the local VAT registration number:

1. In your Shopify admin, go to the Settings → Taxes and duties page.
2. In the Regional settings section, click European Union.
3. In the Collect VAT in an EU country section, click Collect in another location.
4. Select the Registration country and enter your VAT number. Leave this field blank if you've applied for a VAT number but don't have one yet—you can add it later.
5. Click Collect VAT to save your changes.
6. To add registration numbers for additional countries, repeat by clicking Collect VAT in an EU country and confirming with Collect VAT.

If you can't select an additional country you're VAT-registered in, you may need to create a shipping zone first.

To create a shipping zone:

1. In your Shopify admin, go to the Settings → Shipping and delivery page.
2. In the Shipping section, click the shipping profile you want to add zones to.
3. In the Shipping zones section, click Add shipping zone.
4. Name the zone, add the country (or countries) you're VAT-registered in using the search bar, and click Done.
5. Add shipping rates to make the zone available.
6. Click Save to apply the changes

Special rules apply when selling digital goods from Germany to other EU countries. Before applying these rules, it's important to understand exactly what qualifies as a digital service.

Digital goods or services include radio and television broadcasting services, telecommunication services, and electronically supplied services, such as online magazines, music, films, and games.

Using the internet to facilitate a sale doesn't automatically make it a digital service.

For example, when an order is placed and processed electronically through a Shopify store, but the product itself is a physical good, this remains a standard sale of goods and follows the standard VAT rules described above.

The VAT rules when selling digital services

If you supply digital services from Germany to other EU countries, those sales count toward the same €10,000 EU-wide threshold used for physical goods.

This is a combined threshold covering both intra-EU distance sales of goods and digital (TBE) services together.

While your total cross-border sales stay below €10,000, you can continue charging German VAT.

Once your combined goods-and-digital sales exceed that threshold, you must charge VAT at the rate of each customer's country for sales to non-VAT-registered customers (B2C), resulting in different VAT rates per country, ranging from 17% to 27%.

If you sell digital services to VAT-registered businesses (B2B), the responsibility for VAT shifts to them under the reverse charge mechanism.

Since the same €10,000 threshold and OSS registration already apply to your physical goods, you don't need a separate registration for digital services.

The Union OSS scheme now covers both goods and digital services under a single registration, letting you report VAT for all your qualifying EU sales through one portal in your home Member State.

Once your tax rates are set up correctly, Sufio automatically generates valid invoices with an accurate VAT breakdown for every order.

Invoices can be created in multiple languages and include all the necessary details to make them compliant with invoicing legislation in the EU.

Issuing invoices with the correct tax breakdown is crucial for your bookkeeping and tax purposes.

For B2B sales, Sufio invoices automatically include all required information, along with the VAT registration number (USt-IdNr., or Umsatzsteuer-Identifikationsnummer) of both your store and your business customers.