A taxable supply is one that involves the provision of goods or services that are subject to a VAT rate, including zero rate. In Germany, VAT-registered sellers of goods and services must charge the appropriate VAT rate and collect the tax for payment to the German tax authorities via a VAT filing system.
Germany’s standard VAT rate is 19%. Some goods and services are subject to a reduced VAT rate of 7%. Some services (including banking, health, and social work) are VAT exempt.
Type of rates
Type of products or services
|Standard rates||19%||All Taxable goods and services not included in the reduced or zero rates|
|Reduced rates||7%||Some Water Supplies
Medical Equipment for Disabled Persons
Local Public Transport
Books, Audiobooks and Newspapers
Writers / Composers
Admission to cultural and certain sports events
Take away food
Medical and Dental Care
Cut flowers and plants
Types of gold coins and jewellery
|Zero rated||0%||Intra-community and International Transport (with some exclusions)|
|Option to tax for exempt supplies.||For certain VAT-exempt supplies, such as land, buildings, and financial transactions, the supplier may elect to classify the transaction as taxable and, if certain conditions are met, collect corresponding input tax. Additional conditions may apply. The supply or service must be supplied to an entrepreneur for commercial purposes.|
Numerous nations introduced temporary modifications to their VAT rates in response to COVID-19. VAT rate reductions on products and services sold by companies that were particularly hit hard by the pandemic’s economic fallout—such as the hospitality sector—were the most prevalent.
To learn more about the implications of COVID-19 in Germany, please visit our news section by Clicking Here
Last Updated: 16/01/2022
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The input tax deduction was claimed on the issued sales invoice by a company where the taxpayer was also providing funds. However, the tax office rejected the deduction, claiming that the payment was a non-taxable grant. The court allowed the deduction during the appeal.
While Germany is currently in the midst of the corona virus pandemic it has adopted the largest assistance package in history in order to combat the Covid19. As a result, all businesses affected by the pandemic
The court ruled that the self-employed teachers providing services for schools as freelancers are not VAT exempt. Freelancers are only exempt from trade tax (Gewerbesteuer), and not from VAT (Umsatzsteuer or Ust).