Questions and answers about purchasing

You received this information because we identified your company as a potential supplier of telecommunications services. If you provide telecommunications services to the named Telekom companies (= companies with a reseller certificate for telecommunications services), VAT liability transfers to those companies. You must take this into account when issuing invoices. Such invoices must be issued without VAT. 

The new provision was introduced into the VAT Act through the Annual Tax Act 2020.

The rule generally applies from 01/01/2021—more specifically, to services provided on or after 01/01/2021. For the period from 01/01/2021 to 03/31/2021, the tax authorities continue to provide relief to facilitate a smooth transition for businesses. You can find information about this in the Federal Ministry of Finance's letter dated 12/23/2020 (reference number:  III C 3 - S 7279/19/10006 :002).

You can find the provisions in section § 13b of the German Value Added Tax Act, in the version effective as of 01/01/2021. Specifically: § section 13b(2) and section 13b(5) of the German Value Added Tax Act.

Normally, the business owner (supplier) who provides a supply for consideration owes the applicable VAT. They show the VAT on their invoices and report it to the tax authorities. With a transfer of tax liability, this is different. In this case, the VAT liability no longer rests with the supplier but with the recipient of the supply (customer), who reports the VAT on the transaction and remits it to the tax authorities. The supplier then no longer shows VAT on their invoices. A transfer of tax liability applies exclusively to B2B transactions and only in the cases specifically listed in the German VAT Act. 

Telecommunications services are services provided for the transmission, broadcasting, or receipt of signals, text, images, sound, or information of any kind by wire, radio, optical, or other electromagnetic means. This includes the related assignment or grant of rights to use facilities for transmission, broadcasting, or receipt, including the provision of access to global information networks. 

Telecommunications services can therefore take many forms. The tax authorities provide further guidance in Section 3a.10 of the VAT Application Decree and supplement it with a range of examples. 

A reseller of telecommunications services is a business operator that purchases telecommunications services and sells them on for the most part. The business operator may also engage in other business activities. Reseller status for telecommunications services is verified through a special reseller certificate, which the reseller receives from their tax office upon application. The reseller presents this certificate to their supplier so that the supplier knows it must invoice the reseller for telecommunications services without value-added tax (VAT). 

If a supplier (in Germany) provides telecommunications services to a reseller of telecommunications services in Germany (that is, to a business with a valid reseller certificate), the reseller, rather than the supplier, remits the VAT. The supplier does not show VAT on its invoices for telecommunications services; it issues these invoices to the reseller on a net basis only.