An economic bailout is on its way to the German companies impacted by the COVID19 crisis. The bailout includes among other things, a temporary reduction in the German VAT.
From 1 July to 31 December 2020, the German standard rate will change from 19% to 16%. The reduced rate will change from 7% to 5%.
The purpose of this reduction is to stimulate consumption in German homes.
The change in German VAT is of course also important for foreign companies with a German VAT registration. It is important to alter systems as of 1 July in order to comply with the new VAT rates.
