Reduction of the German VAT

German government has  announced introducing 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 July 1st 2020 and will remain in force until December 31st 2020. The measure is part of a huge stimulus package aimed to reduce the economic impact of the Corona pandemic and boost the consumption. It is in addition to the previously published measure concerning the reduction of VAT rate from 19% to 7%  on German restaurant services during one year.