In Germany, if you wish to incorporate a company, you must first meet certain requirements. Among the most important of these is obtaining a tax number. This is because self-employed people and companies can’t do business in Germany without one.

In this article, we explain what a tax number is, who needs it, and why it’s needed for day-to-day business. We also explain how to apply for a German tax number, what documents are necessary, and what deadlines you need to know.

What’s in this article?

• What is a tax number?
  
• Who has to apply for a tax number?
  
• Why do German businesses need a tax number?
  
• How do German businesses apply for a tax number?
  
• What documents do businesses need to apply for a German tax number?
  
• What deadlines do German businesses need to know?
  

What is a tax number?

A tax number is a unique identification number for taxable natural persons and legal entities in Germany. The relevant tax office assigns them so tax returns and tax payments can be clearly designated. Tax numbers are absolutely necessary for companies, the self-employed, and freelancers so they can fulfill their tax obligations in accordance with the regulations.

The length of the tax number varies according to the federal state. In many German federal states, the tax number follows a standard scheme with 10–11 digits. However, there is also a national scheme with 13 digits that was developed for submitting electronic tax returns via the ELSTER portal.

The tax number contains a variety of information that enables the clear identification of the taxable person. This includes the tax office number and the district number, which represents the geographical region within the tax office. In addition, the number contains the personal serial identification number for the taxable person and a verification code to validate the entire number.

You can find a chart for converting your tax number to the national scheme on the website for the Federal Central Tax Office (Bundeszentralamts für Steuern, or BZSt).

Tax number vs. tax ID

In Germany, there is a difference between the tax number and the tax identification number (tax ID). Every citizen in Germany receives a tax ID from the BZSt when they’re born. It is valid throughout the duration of a person’s life and remains the same when they change their name or place of residence.

Tax IDs are primarily used to clearly identify citizens in the tax system. They are required when communicating with the tax office, opening a bank account, reporting to insurance companies, or applying for childcare benefits. In addition, employers use tax IDs to pay the right amount of income tax to the tax office.

While the tax number is specifically for the taxable person in their function as a business person or freelancer, the tax ID is solely intended for natural persons.

Who has to apply for a tax number?

The following forms of business in Germany must apply for a tax number:

• Sole proprietorships, including freelance professionals, small businesses, and registered merchants

• Partnerships, such as general partnerships (OHGs) and limited partnerships (KGs)

• Corporations, such as limited liability companies (GmbHs) and stock corporations (AGs)

• Foreign companies with business premises or taxable activity in Germany

Why do German businesses need a tax number?

In a company’s day-to-day business, the tax number is important, as it is required to correctly fulfill certain tax obligations. This includes the following:

• Tax returns: The tax number is required when filing tax returns. This applies to tax returns submitted by sole proprietorships and freelancers and to the corporate income tax returns and preliminary value-added tax (VAT) returns submitted by corporations.

• Payments to the tax office: For every tax payment—such as for income tax, trade tax, or VAT—companies must provide the tax number so the payments can be correctly documented.

• Communication with the tax office: All relevant letters sent to the tax office—whether an inquiry, reply, or objection—must include the tax number. This allows the tax office to correctly assign the letter to the business.

• Invoices: Companies must provide their tax number on their invoices, especially if they are subject to VAT.

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How do German businesses apply for a tax number?

If you need a tax number in Germany, you must submit the tax registration questionnaire to the tax office. It contains your company’s most important information and forms the basis of your tax registration. Here are the steps to submit the tax registration questionnaire:

Obtain or request the questionnaire

If you start a company in Germany, you could automatically receive the tax registration questionnaire, or you must request it. For example, when you register a business or enter your company in the Commercial Register, you do not have to request it. In these cases, the tax office automatically sends you the questionnaire.

On the other hand, freelancers must request this form from the tax office. This can be done by phone or by downloading the form via the Federal Ministry of Finance (Bundesministerium der Finanzen, or BMF). Alternatively, you can fill out the questionnaire online via ELSTER.

Apply for a tax number: Step by step

Register with ELSTER

To apply for a tax number in Germany, you must first register with ELSTER. This is the easiest way to complete the tax registration questionnaire. To create an ELSTER account, you can use a certificate file, ID card with a reading device and identity app, security stick, or signature card.

Select the tax registration questionnaire

After registering with ELSTER, locate the tax registration questionnaire at the Form Center. Here, you have to select the right questionnaire depending on your company’s legal formation. There are special versions for sole proprietorships, partnerships, corporations, and foreign companies that are taxable in Germany. Make sure you select the right form, as the requirements can differ according to the company structure.

Enter company details

In the next step, fill out the questionnaire, which has multiple sections. You must enter some basic information about your company, such as the following:

• Company name

• Legal formation

• Type of business activity

• Date of formation

• Estimated earnings

Provide additional details

Depending on the type of company, you might have to enter additional information. Corporations, for example, must answer questions regarding corporation tax, trade tax, and company shareholders. In the case of sole proprietorships, additional information regarding earnings and VAT liability is required.

Review the questionnaire and submit

Once you’ve filled out all the relevant fields, carefully review the questionnaire. Make sure the data is correct and complete. Incomplete or incorrect data can result in a processing delay. If you’re not sure, use ELSTER’s help feature or consult a tax advisor. Once you’re finished, you can submit the completed questionnaire.

Receive your tax number

After processing your application and reviewing your questionnaire, the tax office will send your tax number. This is generally sent via mail to the address provided. The processing time varies between a few days and several weeks, depending on which tax office is conducting the review and how much documentation you have submitted. As soon as you receive your tax number, you can use it for tax-related matters, such as filing tax returns and issuing invoices.

What documents do businesses need to apply for a German tax number?

To apply for a tax number in Germany, there are certain documents you need to have. The necessary documents depend on the type of company and its activity. Generally, the following documents are required:

• Tax registration questionnaire: The completed questionnaire forms the basis for the tax number application.

• Personal ID or passport: You need a valid identification document that confirms your identity.

• Tax ID: Your tax ID is required to register you as a taxable person. This applies especially for sole proprietorships and freelancers.

• Business registration: If you operate a business, you must submit the business registration you received from the relevant municipality or city.

• Information on business activity and expected turnover: In the tax registration questionnaire, you need to indicate the type of business activity and the expected turnover. Make sure your turnover and profit forecasts for the first and second financial years are as realistic as possible. Amounts that are too low or too high can lead to problems with your tax classification.

• Bank details: Your account details are needed for potential refunds or direct debits.

What deadlines do German businesses need to know?

According to Section 138 of the German Fiscal Code (Abgabenordnung, or AO), you are required to complete and file your tax registration form within four weeks of starting commercial operations.

If you miss the deadline, you will normally owe a penalty for late filing, in accordance with Section 240 of the AO. Should filing be substantially delayed, the tax office has the option of defining the bases for taxation according to its own estimates. These estimates are generally not favorable for the taxable person, as they are based on assumptions that might not correspond with actual income. Even further delays to registration can result in fines or tax-related criminal proceedings.