Two different VAT rates apply in Germany
Generally, two different VAT rates apply in Germany. The stan-
dard rate for supplies of goods or services effected in Germany
is 19%. This rate was increased from 16% to 19% at the begin-
ning of 2007.
Certain goods and services are subject to the lower rate of 7%.
The most common examples are paper books/newspapers and
food. As of 2015, a reduced VAT rate for audio books has been
introduced. This requires a physical object in the form of a stor-
age device. Services provided electronically do not beneft from
Certain goods and services are exempt from VAT altogether (“ze-
ro-rated”) if corresponding proof is provided. The most common
examples are intra-EC deliveries of goods and exports of goods
to a non-EU destination, and services related to these deliveries.
The exemption from VAT also applies to certain specifed
services, including medical, educational, charitable or fnancial
services, and services relating to real estate. VAT on expenditure
relating to all of these services cannot normally be recovered
(there are various exceptions to this rule, the main one being
certain fnancial services provided outside the EU).
It is possible
for the supplier to opt to charge VAT on some of these exempt
supplies (mainly land and property, and fnancial services), to
the extent that certain requirements are met, thus allowing the
supplier to recover VAT on related expenditure.