One month extension to implement VAT rate changes Germany
On June 3, 2020 the German government has announced to lower the standard VAT rate from 19% to 16% for a period of 6 months as from July 1, 2020. The lower rate will go from 7% to 5%. The VAT rate change is part of a Corona program to boost the economy. We advise you to prepare your system for these changes to start as from July 1 until December 31, 2020.
UPDATE JUNE 30, 2020 - The German Federal Ministry of Finance published a non-objection regulation in the B2B sector demanded by businesses. This provides businesses a one-month extension to implement the VAT rate changes. As of July 1, 2020, the VAT rate reduces to 16% for the standard rate and 5% for the reduced rate. Invoices issued after this date against the 19% respectively 7% VAT rate would result in unduly charged VAT. With this regulation, Input VAT deduction will be granted in full over the period July 2020 in such circumstances without the need to correct the invoice.