GlossaryEN1 min readUpdated: Jun 26, 2026
VAT exemption on exports
Exporters and freight forwarders rely on VAT exemption on exports to ship goods to third countries free of value-added tax.
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Source: https://www.bzst.de/DE/Unternehmen/Umsatzsteuer/Export/Umsatzsteuer-Export_node.html
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Definition & Explanation
Exporters and freight forwarders rely on VAT exemption on exports to ship goods to third countries free of value-added tax. The underlying principle is destination-based taxation: goods are taxed where they are consumed, not where they originate. The exporter charges zero VAT on the transaction but retains full input tax recovery on all goods and services used in production or handling – a critical distinction from non-deductible exemptions. Qualifying requires verifiable proof of export: typically a customs export declaration or transport document confirming the goods physically left the customs territory. Without adequate documentation, tax authorities may disallow the exemption retrospectively and raise a VAT assessment.
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