8th June 2020
As part of an extensive legal package to support its economy in the wake of the COVID-19 pandemic, the governing parties in Germany have announced that the Government will reduce German VAT rates as of 1 July 2020. The reduction is scheduled to be applicable until 31 December 2020.
The standard rate in this period will be reduced from 19% to 16%, the special rate applicable e.g. on various food and medical products will go down from 7% to 5%.
For foreign companies conducting business in Germany, the reduction is critical with regard to the actual fulfillment date of a project or an order in Germany, which will define the applicable VAT rate. Using the wrong rate may not only lead to a liability for the performing company, it may also lead to a cash impact; as the receiving party could deny payment of an invoice that shows the wrong tax amount, asking for a correction before paying.
READ THE FULL NEWSLETTER HERE
For more information on this developing topic, please contact: Andreas Klier at Pape & Co. GmbH, Munich, Germany andreas.klier@pape-co.de or Thomas Althoff at RLT Ruhrmann Tieben & Partner, Essen, Germany thomas.althoff@rlt.de
Our Global VAT Specialists
Our experienced VAT specialists provide a centre of excellence in the field of VAT & Customs across the world. Besides compliance questions, these experts can answer any day-to-day questions as well as assist you, among others, with the correct qualification of transactions, evaluations of contracts, VAT audits and setting up processes together with creating manuals and guidelines. Visit the new microsite to meet the Global team.
To learn more about the activities of the Global VAT Specialist Group, or any of the other Groups, please contact International Business Development Manager, Nicki Lynn nlynn@cpaai.com.
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