At present, the standard rate of Value-Added-Tax (VAT) in Germany is 19%. In Germany, VAT is collected as Umsatzsteuer (USt). However, there is also a reduced rate of 7%. Germany charges a reduced rate of 7% on some goods and services, for instance, newspapers, accommodation, food, and local transportation.
Furthermore, some goods and services are charged zero-rated VAT or VAT exempt, such as community services, health services, and banking services. It is important to point out here that sales tax does not apply to exports. The VAT system of Germany is based on the Value-Added-Tax system of the European Union.
From 1st July 2020, the standard rate is 19%; however, expected to go down temporarily from 19% to 16%. The change will last all the way to 31st December 2020.
Vat Calculator Germany (2022)
History of VAT in Germany:
Germany got introduced to VAT in 1968. At that time, the standard rate of VAT was 11%. In 2006, VAT was charged in Germany at the standard rate of 16%. The rate reached its current value of 19% in 2007, and it has remained the same ever since. Until July 1st, 2020, the standard rate of VAT was temporarily reduced to 16% till 31st December. Since its inception, the Maximum rate at which VAT was ever charged in Germany has been 19%, and the minimum rate has been 11%.
Goods and Services Exempted from VAT in Germany:
While Germany has one of the highest VAT rates but some Products and Services are either exempted from VAT or zero-rated, for instance:
- Delivery of exports to third party states (states that are part of the Europeans Union)
- Union-Internal Deliveries to states that are part of the European Union
- Granting of Financial Transactions such as loans
- Brokering of Financial Transactions such as loans
- Long term sleeping premises and residential rental. (long term as in more than 6 months)
- Medical Treatment
- Buying of Property
- Selling of Property
Also visit Vat Calculator France.
Q: Do I have to pay VAT in Germany?
Yes, you have to pay VAT at a standard rate of 19% in Germany. There is also a reduced rate of 7% on some products and services. Furthermore, there is also zero-rated VAT in addition to some services and products being exempt from VAT.
Q: How does VAT work in Germany?
VAT is applied to anything you purchase in Germany. However, there are particular circumstances under which the goods you bought are the services you paid for are exempt from VAT or charged VAT at a reduced rate. Unless the thing you bought is a food item or any other necessity, VAT will be applied to that item at a standard rate of 19%.
Q: How much is tax-free in Germany?
Refund Rates in Germany range from 6.1% to 14.5% of the amount of purchase provided that there is a minimum purchase of 25 EUR per receipt. To be eligible for a refund, you must be either older than 18, have a long-term visa, or permanent residence in a non-EU state.
Q: How much is VAT on cars in Germany?
The Car dealer levies a 19% VAT rate at the time the car is purchased in Germany.
Q: Are cars cheap in Germany?
Although Germany has a very high VAT Rate, on the other hand, cars are generally cheaper in Germany than in the United States.