A taxable transaction refers to the offering of goods or services that attract a VAT rate, even if it’s a zero rate. In Germany, those registered for VAT must apply the correct VAT rate when selling goods or services and remit the collected tax to the German tax authorities through a VAT submission process.
The prevalent VAT rate in Germany stands at 19%. A lower VAT rate of 7% is applicable to certain goods and services. Meanwhile, some services, like banking, health, and social work, are exempt from VAT.
View more in our comprehensive guide below.
Standard VAT rate | |
A standard VAT (Value-Added Tax) rate is the common rate that a country applies to most goods and services. While it covers a vast majority of items, there are exceptions. Essential items or certain specific goods and services might benefit from a reduced rate, as detailed below. | |
Rate | Good or Services |
19% | This rate is applicable to most sales of goods and services and encompasses all products and services that are not subject to VAT rates. |
Reduced VAT rates | |
There are goods and services that may qualify for a lower value-added tax (VAT) rate presented below and are subject to change: | |
Rate | Good or Services |
7% | Reduced rate |
Foodstuffs such as bread, milk, meat, and vegetables (excluding luxury food items) | |
Printed books (excluding e-books), newspapers, and magazines | |
Certain pharmaceutical products, medical aids, and prosthetic devices | |
Public transport services, including long-distance travel by bus and train | |
Hotel accommodations (excluding certain ancillary services) | |
Admission to cultural events, such as theater performances, concerts, and museums | |
Copyright license or assignment | |
Sales of art work | |
0% | Zero rated products |
Intra- community supplies | |
Exports | |
Processing of goods under the temporary admission procedure for subsequent export | |
Supplies of specific goods that are stored under a VAT suspension arrangement in approved warehouses and related services | |
Aviation-related services for air traffic control and navigation | |
Cross-border transport of passengers | |
Sales of gold to national banks | |
Supplies of goods and services by the Federal Railway Company | |
Catering services provided on international voyages by seagoing vessels | |
Supplies to foreign military forces that operate within the framework of Common Security and Defense Policy | |
Supplies to foreign military forces that are part of NATO and stationed in Germany or other Member States. | |
Transport services for goods that are being exported, arranged by intermediaries on behalf of the supplier or the customer | |
Exempt From VAT | |
Financial services such as provision of shares, insurance policies, investment fund management, pension schemes and exchange transactions involving virtual currencies. | |
Supplies under Real Estate Acquisition Law such as Land, Buildings, Walls, Trees, Plants and Structures or natural objects attached to land. | |
Health care services associated with auxiliary services provided by institutions | |
Educational and training services provided by schools and universities | |
A variety of social welfare and youth services | |
Boarding services and temporary accommodation services for students and pupils | |
Postal services such as delivery of letters and parcels, face-value stamps | |
Race Betting and Lottery Law (e.g., lottery tickets); and | |
Goods and services provided by registered charitable organizations |
Last Updated: 17/01/2025
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