Germany: VAT rate reduced from 19 to 16 percent and tax rate will drop from 7 to 5 percent between July 1 and Dec 31, 2020. German VAT

COVID19 – GERMANY VAT RATES

In order to boost the economy during the corona pandemic, Germany has put together an economic package worth billions. On 3 June 2020, the German parliament proposed to temporarily reduce the VAT rates from 1 July 2020 until 31 December 2020.In order to boost the economy after the corona pandemic, Germany has put together an economic package worth billions. On 3 June 2020, the German parliament proposed to temporarily reduce the VAT rates from 1 July 2020 until 31 December 2020.

• Standard rate is to be reduced from 19% to 16%.
• Reduced rate is to be reduced from 7% to 5%

The classification from the standard 19% rate to the reduced 7% VAT rate for catering food services was announced by government earlier in May.  The reduced rate will start 1 July 2020 and run until 1 July 2021. Take-away and delivered food is already liable to 7% VAT

Germany follows the EU directives according VAT rates. standard VAT rate in Germany was at 19% before the coronavirus. If there is a difference between Germany’s law and EU directives then EU law should be imposed.