• Temporary Reduction of German
    Vat Rates
COVID-19 Insight:

Temporary Reduction of German Vat Rates from 1 July 2020 to 31 December 2020

04 June 2020

In an unexpected statement, German chancellor Angela Merkel and several high ranking
cabinet members have announced late Wednesday evening (3 June 2020) to introduce a temporary
reduction of the German VAT rates from 19% to 16% (regular VAT rate) and from 7% to
5% (reduced rate), respectively. The reduced VAT rates are scheduled to come into effect on 1
July 2020 and remain in force until 31 December 2020. The measure is part of a huge stimulus
package aimed to reduce the economic impact of the Corona pandemic and boost domestic
demand. Provided by BDO Germany.

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