In view of the Corona crisis, the German government in form of the coalition committee agreed on 3 June 2020 on a comprehensive economic stimulus and crisis management package. One of the tax measures is the temporary reduction of the VAT rate from 19 % to 16 % and from 7 % to 5 % from 1.7.2020 to 31.12.2020.
We think that the draft bill will be processed very shortly. Hence, a legislative implementation can be expected in rapid speed. Companies should therefore quickly gain an overview of the possible effects of the change and take appropriate conversion measures.
In this flyer, we give a first – not conclusive – overview of important points that need to be considered when making adjustments: