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

You run your own store, for example with Shopify? Then you owe the VAT yourself: 19 percent, reduced 7 percent (§ 12 UStG). Small business owners (Kleinunternehmer) are exempt up to €25,000 (previous year) and €100,000 (current year) (§ 19 UStG). If your sales to private customers in all other EU countries together exceed €10,000, the tax of the destination country applies in principle (§ 3c UStG). The threshold applies only if your business is established only in Germany (§ 3c (4) UStG).

Last updated: 29 October 2026

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

In short

You owe the tax: on supplies in Germany, whatever store system you use (§ 1 (1) no. 1 UStG).
EU customers: Over €10,000 of distance sales, the destination country applies in principle. You can declare it in the OSS (§ 18j UStG).
Third 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 a business and make supplies in Germany for consideration (§ 1 (1) no. 1 UStG). A business is anyone who carries on a commercial or professional activity independently. Every continuing activity to earn income is commercial or professional (§ 2 (1) UStG). If you sell goods in your store on a lasting basis to earn income, this applies. For products made on demand, see Print on demand VAT Germany: what sellers must know.

You are exempt for all your turnover only as a small business owner (see below). Individual supplies can be tax-exempt, such as export supplies to third countries (§ 4 no. 1 lit. a UStG). You file the advance return and the annual return with the tax office. How that works in ELSTER is explained in German advance VAT return (UStVA): filing online.

What this means for you: As a Shopify merchant you generally owe VAT in Germany for your supplies and file advance and annual returns.

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

The tax is 19 percent of the taxable amount for every taxable supply (§ 12 (1) UStG). It is reduced to seven percent for supplies of the goods listed in Annex 2 of 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 this means for you: Look up the product in Annex 2 before you apply the reduced rate, because the product decides the rate, not the store.

What applies to small business owners in my own store?

Your turnover is 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 in the current year, only your total turnover in that year counts. The limit of €25,000 then applies (section 19.1 (3) UStAE).

As a small business owner you do not, as a rule, file an advance VAT return. You must not show VAT separately and you have no input VAT deduction (Finanzamt Hessen). When this procedure ends and what a waiver means: VAT return for a small business in Germany.

What this means for you: As a small business owner, check your turnover against both limits and do not show VAT on your invoices.

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 where the goods are when the transport or dispatch ends (§ 3c (1) UStG). That means the VAT of the destination country applies.

There is an exception for small sellers with a seat in only one member state. The total of such supplies and certain services to customers in other EU countries must not have exceeded €10,000 in the previous year. It must not exceed it in the current year either. Then the place of supply stays in Germany (§ 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 in Germany under § 3c UStG and EU OSS threshold of €10,000.

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

What this means for you: Above €10,000 in sales to other EU countries, the destination country's VAT applies, so check the threshold.

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

For distance sales in the Community, you can take part in the special scheme (OSS). You notify your participation before the start of the tax period from which you use the scheme. Businesses established in Germany notify it to 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. The tax calculated 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 this means for you: Register for the OSS before the period in which you want to use it, and file and pay by the dates.

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 apply (§ 4 no. 1 lit. a, § 6 UStG). It applies, for example, if the business transported or shipped the goods to the third country (§ 6 (1) no. 1 UStG). You must prove the conditions (§ 6 (4) UStG). Which taxes arise in the destination country is governed by its law.

What this means for you: For exports outside the EU, keep the proof, because the exemption depends on it.

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 in 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 an export without proof as tax-exempt. The conditions must be proven (§ 6 (4) UStG).
Showing VAT as a small business owner. This is not allowed (Finanzamt Hessen).

What this means for you: Avoid these mistakes: the German rate for all EU customers, a threshold check only for this year, exports without proof and VAT shown as a small business.

How VAT GPT helps

VAT GPT is the tax software for online sellers, freelancers and small businesses in Germany. It calculates and files in one place, in this order:

your OSS return
VAT
EÜR
trade tax
income tax

If you also sell on Amazon or eBay next to your store, all sales come together in one place:

Upload: You upload Amazon or eBay reports as CSV. You upload invoices and receipts as a PDF or photo. The AI reads amounts, countries and tax rates.
Check: VAT GPT splits the sales into Germany and EU (OSS). From this come the advance return, monthly or quarterly, and the OSS return for all EU countries. You check and confirm.
Send: With VAT GPT Pro you send via ELSTER to the tax office and the OSS return to the BZSt.

Try VAT GPT

Frequently asked questions

Do I have to pay VAT with Shopify? Yes, if you are a business and make supplies in Germany. Only small business owners within the limits of €25,000 and €100,000 are exempt for all turnover, in the year of founding €25,000 (§ 19 UStG, section 19.1 (3) UStAE). Individual supplies such as export supplies are tax-exempt (§ 4 no. 1 lit. a UStG).

Which tax rate applies in my store? In principle 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 you, as a seller with a seat in only one member state, exceed the €10,000 threshold in 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 the OSS? You notify your participation to the BZSt before the start of the tax period (§ 18j (1) UStG). Participation applies uniformly to all EU member states.

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

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