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Understanding VAT Charges for German Entity Contracts

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When entering a contract with New Remote People Global Partners Germany GmbH through your German entity (e.g. GmbH, AG, UG, or other), a 19% value added tax (VAT), referred to as Umsatzsteuer (USt.), is levied on the total invoice amount, including both payroll charges and service fees.


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It's noteworthy that payroll costs aren't exempt from VAT because you're acquiring an 'employer of service'. This arrangement mirrors Germany's AÜG setup (Arbeitnehmerüberlassung), where a similar 19% VAT applies to the entire payroll invoice of leased employees.

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