VAT | 4. June 2020

Updating VAT rates – no problem thanks to VAT Engine

The German federal government has decided on a temporary reduction of the sales tax to 16 and 5 percent. With the VAT machine of ClearVAT AG, online merchants always receive all changes automatically in the system or shop. by

As part of its economic stimulus package, the German government has decided to temporarily reduce VAT rates. The changes at a glance:

  • The normal VAT rate will be reduced from 19% to 16%, the reduced rate from 7% to 5%.
  • The new VAT rates will come into force on 1.7.2020 and will apply for a limited period until 31.12.2020.

The new tax rates must also be taken into account on retailers’ invoices. This also applies to online traders in the EU who send goods to Germany. Entrepreneurs must adapt their shops or ERP systems. This is a huge effort for retailers and will result in financial losses if implemented incorrectly, .

ClearVAT automatically maintains adjustments such as these via its VAT engine and makes them available to online merchants dynamically. This automated updating saves retailers from having to make manual changes. But it is not only the six-monthly special regulations that need to be taken into account for cross-border trading. The VAT Engine knows the tax rates for more than 450,000 products, including exceptions and regional specifics in all 27 EU countries.