Input Tax Refund Procedure: New Requirements Starting in 2026 and What Businesses Should Keep in Mind Now

Companies with cross-border business relationships regularly pay value-added tax abroad—for example, for trade show appearances, business trips, or the purchase of services. Under certain conditions, these input tax amounts can be reclaimed through the input tax refund procedure.

Effective January 1, 2026, the regulations governing the input tax refund procedure were amended to reflect ongoing digitalization through a revision of the Value-Added Tax Implementation Ordinance and a letter from the Federal Ministry of Finance (BMF) dated June 2, 2026. The aim of the new regulations is to make the procedure more efficient and seamless, as well as to standardize the documentation requirements.

Exposition

The input tax refund procedure allows businesses to receive a refund of value-added tax paid abroad, provided that the legal requirements are met. Within the European Union, applications are generally submitted electronically via the respective portal of the country of residence. Special rules apply to businesses from third countries.

The changes that took effect on January 1, 2026, primarily affect businesses that are not established within the EU and submit a refund application to the Federal Central Tax Office (BZSt).

The focus is on the further digitization of the process. In the future, supporting documents must generally be submitted in digital form. The previous requirement to submit extensive paper documentation will be largely replaced by electronic documents. In addition, a detailed itemized list of the input tax amounts claimed must be attached to the application. This is intended to facilitate and expedite processing by the BZSt.

The Most Important Changes Starting in 2026

The new regulations introduce several practical simplifications.

A key step is the complete digitization of the submission of supporting documents. Invoices and import documents are generally uploaded via the online portal of the Federal Central Tax Office. Submission on a storage medium is permitted only in justified exceptional cases.

In addition, a threshold of 250 euros has been introduced. Invoices or import documents generally need to be submitted with the application only if the total amount of the respective document exceeds this threshold. Small-amount invoices—such as for taxi rides or local public transportation tickets—need to be submitted only upon the express request of the Federal Central Tax Office. This significantly reduces the administrative burden, particularly when dealing with a large number of smaller receipts.

Another new development is that business certificates can now also be submitted in digital form. However, the BZSt reserves the right to request the submission of original documents in individual cases. At the same time, the regulations for business owners from third countries have been largely aligned with the existing regulations for business owners based in the European Union. This results in a more uniform and transparent procedure.

Practical Relevance

For companies operating internationally, these changes primarily mean a simplification of the application process. The reduced number of supporting documents required and the ability to submit them digitally can significantly reduce administrative burdens.

At the same time, however, the requirements for proper digital document management are increasing. Companies should ensure that all invoices are fully archived digitally and are available electronically at all times. It is also advisable to compile the necessary documents in a structured manner throughout the year so that refund applications can be submitted on time and in full.

Special attention should also be paid to verifying whether the input tax refund procedure is applicable at all. If a company carries out taxable transactions in the country where the refund is sought, VAT registration may be required instead. In such cases, the input tax deduction is generally not processed through the refund procedure but rather as part of the local VAT return.

Conclusion

The changes effective January 1, 2026, represent another step toward the digitization of the input tax refund process. In particular, electronic record-keeping, the introduction of the 250-euro threshold for invoices to be submitted, and the standardization of procedural requirements will significantly ease the burden on companies operating internationally.

Despite these simplifications, the process remains formally complex. Companies should review their processes for digital document management and the preparation of refund applications and ensure well in advance that all legal requirements are met. Careful planning helps to efficiently assert refund claims and avoid unnecessary delays.