SaaS · 🇺🇸 United States · 🇩🇪 Germany
The €80k German VAT bill nobody had budgeted for
A US SaaS company selling into Germany assumed a registration threshold applied. For a non-established business, it does not.
US SaaS, ~€420k annual German revenue. Client identity withheld — we publish names only with written permission, so this engagement is described by its shape rather than by who it was.
€80k
Exposure quantified
0
Threshold that actually applied
Voluntary
Disclosure route taken
The situation
- The company sold to both business and consumer customers in Germany and treated all of it as export revenue.
- Someone had checked 'the German VAT threshold' and concluded they were below it — that relief applies to businesses established in Germany.
What we found
- No registration threshold applied, so the obligation ran from the first taxable supply.
- B2C sales carried 19% VAT that was never charged to customers and never remitted, on roughly €420,000 of consumer revenue.
- VAT IDs were collected at checkout but never validated against VIES, so reverse-charge treatment could not be evidenced for part of the B2B base.
- No EU stock, which meant OSS was available for the distance-sales element.
What we did
- Segmented 24 months of revenue by country and by whether a validated VAT ID existed.
- Registered and made a voluntary disclosure rather than waiting for the Finanzamt.
- Implemented VIES validation at checkout with the result and timestamp stored against the customer.
- Set up OSS reporting for the distance-sales element alongside the domestic position.
The outcome
- Exposure was quantified at roughly €80,000 of principal, disclosed voluntarily, and settled with reduced penalties.
- Ongoing German VAT is now filed monthly through ELSTER and reconciles to the ledger without adjustment.
What we'd flag
The B2C VAT was never collected from customers and never will be. That €80,000 came out of margin — this is a cost the company absorbed, not one it recovered.
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