Current Changes in German VAT Law as of July 2025

As of July 2025, significant changes to value-added tax (VAT) regulations apply in Germany, particularly concerning export transactions. These changes are based on recent rulings by the European Court of Justice (ECJ) and have been incorporated into the German VAT Application Decree (UStAE) by the Federal Ministry of Finance (BMF).

Background of the Reform

The updates were prompted by recent ECJ decisions in the cases Cartrans Spedition SRL (C-495/21), Vinš (C-275/21), and Unitel (C-653/21). The Court clarified that VAT exemption for exports or input tax deductions must not be denied solely due to the absence of formal documentation if objective evidence indicates that the export actually occurred.

Key Changes

1. More Flexible Proof Requirements for Export Transactions
   Businesses may now use alternative and objectively verifiable documents to prove export activity. This includes freight documents, delivery confirmations, logistics records, or correspondence with the buyer.
2. No Longer Mandatory: Exit Note (Ausgangsvermerk)
   If the official electronic exit note is unavailable, other credible evidence may suffice to substantiate the export process.
3. Revised VAT Application Decree (UStAE)
   Section 6.5 of the UStAE has been revised to reflect the new ECJ case law and provide more flexible documentation standards.

Practical Implications for Businesses

• Exporters benefit from greater legal certainty and flexibility in documenting export shipments, particularly in complex supply chains.
• Companies working with international or diplomatic clients may still qualify for VAT exemptions even without conventional export documents.
• Reduced bureaucracy and fewer disputes: The reform minimizes the risk of tax corrections caused by minor procedural errors.

Recommended Actions

• Review and adapt internal processes for documenting export transactions.
• Ensure thorough archiving of alternative proof documents.
• Consult tax professionals to evaluate the impact on existing business models.

Conclusion

The VAT law changes effective from July 2025 give exporters more leeway in proving tax-free deliveries. At the same time, the requirements for documentation quality are rising. German tax practice is increasingly aligned with EU legal standards, emphasizing the economic reality of cross-border transactions.