Which tax rates apply to different goods and services?
June 14, 2023 | 45,00 EUR | answered by Friedhelm Sauer
Dear VAT tax advisor,
My name is Fanni Hoffmann and I run a small online trading company that offers various goods and services. Lately, I have noticed some uncertainties in calculating the VAT, as I am not sure which tax rates apply to which products.
Currently, I sell both physical products such as clothing and electronics, as well as digital services like online courses and design templates. I am unsure whether all products are subject to the standard VAT rate of 19% or if there are products that qualify for a reduced rate of 7%.
My concern is that I may be applying incorrect tax rates and could face issues with the tax authorities. Therefore, I would like to know from you which tax rates apply to the different goods and services, and how I can ensure that I calculate the VAT correctly.
What options are available to ensure that I apply the correct tax rates and how can I adjust my accounting accordingly? Thank you in advance for your support.
Best regards,
Fanni Hoffmann
Dear Mrs. Hoffmann,
Thank you for your inquiry regarding value added tax in your online trading company. It is important to apply the correct tax rates to avoid issues with the tax authorities. Therefore, I will explain in detail below which tax rates apply to the various goods and services you offer and how you can ensure that you calculate the value added tax correctly.
First of all, it is important to know that in Germany there are basically two different value added tax rates. The standard rate is 19%, while the reduced rate is 7%. The standard rate is usually applied to most goods and services, while the reduced rate applies to certain products such as food, books, and some other goods.
For physical products such as clothing and electronic items, the standard rate of 19% generally applies. For digital services such as online courses and design templates, it depends on whether it is a cultural service, for which the reduced rate of 7% applies, or another service, for which the standard rate of 19% applies. It is important to check the exact provisions of the sales tax law to ensure that you apply the correct tax rates.
To ensure that you apply the correct tax rates, I recommend contacting a tax advisor specialized in value added tax. A tax advisor can help you determine the right tax rates for your products and services and adjust your accounting accordingly. Additionally, you can also take training courses on value added tax to deepen your knowledge and ensure that you calculate the value added tax correctly.
I hope that this information has been helpful to you and I am available for any further questions. Thank you for your trust and I wish you success with your online trading company.
Best regards,
Friedhelm Sauer
