What value-added tax rates apply in Germany?
March 15, 2024 | 40,00 EUR | answered by Felix Schönecker
Dear tax advisor,
My name is Verena Kaiser and I am a self-employed entrepreneur in Germany. I run an online shop where I sell various products. Lately, I have been dealing with the topic of value-added tax and I am somewhat unsure about the applicable VAT rates in Germany.
As background information, I can tell you that I have been selling products at the regular VAT rate of 19% so far. However, I have heard that there are also products that are subject to a reduced VAT rate. Therefore, I am wondering which VAT rates apply in Germany and which products are subject to each rate.
My concern is that I may have applied incorrect VAT rates and could potentially face tax issues as a result. Therefore, I would like to have clarity on the applicable VAT rates and the correct application of them.
Could you please explain in detail which VAT rates apply in Germany and which products are subject to each rate? If I have been applying incorrect VAT rates so far, how can I correct this and what steps do I need to take for this?
Thank you in advance for your help and support.
Sincerely,
Verena Kaiser
Dear Mrs. Kaiser,
Thank you for your inquiry regarding the current VAT rates in Germany and the correct application of these in your online shop. I understand your concerns about possibly applying incorrect VAT rates and thereby facing tax issues. I would be happy to explain in detail the current VAT rates in Germany and which products are subject to each rate.
In Germany, there are basically two different VAT rates: the standard rate of 19% and the reduced rate of 7%. The standard rate of 19% applies to most products and services, while the reduced rate of 7% is applicable to certain goods and services.
Products subject to the reduced VAT rate of 7% include, among others, food, books, magazines, medicines, certain cultural events, and some other products and services. It is important to note that not all products automatically fall under the reduced rate, but there are specific regulations in place.
If you have been selling products at the standard VAT rate of 19% that should actually be subject to the reduced rate of 7%, it is important to correct this. You should first check which products in your online shop are subject to the reduced rate and adjust them accordingly. Additionally, you should correct the incorrectly calculated VAT and, if necessary, make a repayment to the tax office.
To ensure that you are applying the VAT rates correctly, I recommend that you contact a tax advisor. A tax advisor can assist you in reviewing your VAT returns and ensure that you do not encounter any tax issues.
I hope this information is helpful to you and I am available to answer any further questions you may have.
Yours sincerely,
Felix Schönecker
