Germany – Reduction of VAT rate as from 1 July 2020 to 31 December 2020

Yesterday the governing coalition in Germany agreed to a reduction of the VAT rates in Germany from 01 July 2020 to 31 December 2020 as follows:

Regular rate reduced from 19% to 16%
Reduced rate reduced from 7% to 5%

This decision has to be put in writing and agreed upon by the German parliament (which is why there are no official publications by the German tax authorities available yet). It is safe to assume that this change will come into force 01 July 2020 considering the frequency of law changes in the wake of COVID-19 and that the governing coalition is in agreement on this topic.

See link to newsflash of the German tax authorities below (in German only):

https://www.bundesfinanzministerium.de/Content/DE/Standardartikel/Themen/Schlaglichter/Konjunkturpaket/2020-06-03-konjunkturpaket-beschlossen.html

One thought on “Germany – Reduction of VAT rate as from 1 July 2020 to 31 December 2020

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