Understanding VAT Charges for German Entity Contracts

When entering a contract with New Horizons 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. 

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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