German VAT July - December 2020 Reduced: Where You Can Save

2023 Author: Sheila Hailey | [email protected]. Last modified: 2023-08-25 04:29

• The VAT reduction runs from July 1, 2020 to December 31, 2020.
• Over time, the normal VAT rate will drop from 19 percent to 16 percent.
• The reduced VAT rate is reduced from 7 percent to 5 percent.
• This only applies to services and sales that are performed during this time.
• The shops do not have to pass on the VAT reduction to the consumer!

You can determine how high the saved VAT share of a product and which net or gross prices result with a free VAT calculator, which also takes into account the VAT reduction of 2020:

Download VAT calculator

What does the VAT reduction mean for companies and customers?

VAT is reduced, which means that all goods and services should actually be cheaper. But that is not to be expected. From July 1st, the invoice for the new television will only be 16 percent VAT, but the price will probably remain the same. This only increases the company's profit and the customer has nothing of it. The companies only have to adjust the VAT rate on the invoice - not the gross price.

It looks different if you "buy" something at an agreed net price. At the end of the day, for example, VAT is added to a craftsman's bill, which in the second half of 2020 will only be 16 percent.

In fact, when it comes to gross prices, companies can decide for themselves whether or not to pass on the VAT reduction. You can leave the prices at the old level and simply adjust the VAT rate on the invoice, but you can also pass on the VAT in whole or in part.

As the operator of a web shop, you should currently make sure that the displayed and calculated VAT rates are changed, because that will surely attract the vultures among the lawyers

These companies pass on the VAT reduction:

A number of companies have decided to lower prices, for example:

Company / shop	Products
A didas	Sportswear
Aldi	Food
Alternate	Consumer electronics
Amazon	Internet department store (The reduction in VAT applies to the goods traded by Amazon itself. Amazon sales partners decide individually whether they participate!)
Apple	Consumer electronics
B ader	Internet department store
bauhaus	Hardware store
beyerdynamic	Audio electronics
Bett1.de	Mattresses
betten.de	beds
blue	Cellular
bonprix	Fashion / furniture
brands4friends	Branded goods
C &A	clothing
Compustore	Apple consumer electronics
Conrad Electronic	electronics
Cyberport	Consumer electronics
D eichmann	Shoes
Deutsche Bahn	Train rides
DM	Drug store
DocMorris	Online pharmacy
Douglas	Perfume & cosmetics
E deca	Food
Engelbert Strauss	Workwear
F ressnapf	Pet supplies
G lobus hardware store	Hardware store
Gravis	Apple consumer electronics
H agebau	Hardware store
HappySize	Fashion
Hornbach	Hardware store
Hugo Boss	Fashion
I KEA	Furniture
J ako-o	All about the child
K onshore	Food
bell	Mail order company
L ego	toy
Lidl	Food
M acTrade	Apple consumer electronics
Media market	Consumer electronics
Medpex	Online pharmacy
N etflix	Video streaming (from July to December 2020, fees are reduced by 3 percent)
net	Food
O BI	Hardware store
Otto	Mail order company
penny	Food
puma	Sports accessories
Q VC	Mail order company
R eno	Shoes
Rewe	Food
Rossmann	Drugstore
S aturn	Consumer electronics
Shop pharmacy	Online pharmacy
Spotify	Streaming music
T amaris	Shoes
devil	speaker
W itt pastures	clothing
Z ooplus	Pet supplies

Other companies may follow with a VAT cut or special offers. We will update this list regularly so that you have an overview of where you can save in these 6 months.

Aldi fully passes on the VAT reduction to customers:

7 facts about Aldi that you didn't know

Conclusion

Someone will earn or save more by lowering VAT, but that's not necessarily the customer. For many companies, this short-term reduction means an enormous amount of red tape. Anyone who jumps on the train in a customer-friendly manner is faced with the problem in six months of conveying the subsequent increase to the old prices to their customers.

Most dealers perceive the short-term reduction in VAT as a burden, the alleged advantages of which are partly eaten up by the effort. The German Trade Association (HDE) sees a possible incentive to buy in the run-up to Christmas, but this will probably have to be paid for by stagnating purchases in the first quarter of 2021 if tax rates rise again.

Online shopping or would you prefer to stroll through the city in the classic way, look at things and shop in the store? What's your favorite when you get new things? Let us know your opinion in our survey on the topic!

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