German VAT accounting

What is a permanent VAT extension?

Extend the VAT deadline Companies, the self-employed and freelancers must report sales tax to the tax office either monthly or quarterly in a sales tax pre-declaration and then again in a sales tax return the following year.

While the tax office gives the entrepreneur a deadline for the VAT return by May 31 of the following year, there are only 10 days left for the submission of the VAT returns.

Founders in particular, who have to submit their advance sales tax returns on a monthly basis, are often under time pressure. The advance sales tax return for January must already be available on February 10th. The situation is similar for quarterly sales tax returns: The pre-registration for the first quarter must be received by April 10th.
The long-term extension extends the deadline for submitting the VAT return by one month. The pre-registration for January does not have to be received until March 10, the pre-registration for the first quarter does not have to be received until May 10 at the tax office.


  • The tax office grants a longer payment term of 2 months for the customer
  • One month longer time to submit receipts
  • Avoidance of late payment penalties, since one has more time to file his advance sales tax return
  • More time in planning the cash flow, as the sales tax from two months ago is taken into account

The special advance payment

Entrepreneurs who submit their advance VAT returns monthly must also make a special advance payment. For this purpose, the applicant takes the total of the sales tax advance payments made in the previous year and makes an eleventh of the amount as a special advance payment.

Example: * * An entrepreneur paid sales tax of EUR 11,000 in the previous year. As a special advance payment, he has to pay 1/11 of the amount: 1,000 euros.

If the entrepreneur only opened his business in the previous year and did not pay sales tax for a full year, then he must extrapolate the amount of the sales tax paid to the year and make 1/11 of this amount as a special advance payment (Section 47 (2) UStDV).

Example: * A founder would like to apply for a permanent extension in 2020. He founded in August 2019. From August to December he paid a total of 3,000 euros in sales tax. The special advance payment is calculated as follows:
3,000 / 5 = 600
600 x 12 = 7,200
7,200 / 11 = 655
Accordingly, he has to make 655 euros as a special advance payment

If the entrepreneur has only found in the current year, then he has to pay the eleventh part of the anticipated advance payments for the current year as a special advance payment (Section 47 (3) UStDV). The entrepreneur must submit the calculation of the special advance payment with the application for a long-term extension and must have paid in by the cut-off date (Section 48 (2) UStDV).

The special advance payment is not a fee, but a kind of deposit. The taxpayer deducts them in the VAT return for the last period for which they applied. So in the VAT pre-registration for December, which is due by February 10 of the following year. This also applies if the company did not generate any sales in December.

Attention: * The entrepreneur must recalculate, register and pay the special advance payment annually by February 10 (section 14.8 (3) UStAE).

Entrepreneurs who pay quarterly in advance do not need to make a special advance payment.

Deadlines: Extension of the deadline for each key date

There is no need to apply for a permanent extension at the beginning of the year for the entire year. It can be applied for at any time on the cut-off date for the VAT return for which it should apply for the first time. If an entrepreneur who registers his VAT monthly, requests that he extend his long-term term by April 10, then it will apply for the pre-registration for March for the first time.

Quarterly VAT returners must apply for their long-term extension by April 10 if they are still to apply for pre-registration for the first quarter. Like monthly advance payers, they can apply for a permanent extension to every other quarter of the year.