The German government has announced an economic stimulus package with lower VAT rates and further relief for companies and municipalities to reduce the economic impact of the COVID-19 pandemic. Especially the changes regarding VAT have positive effects for online sellers, but can certainly be considered in tax reports and calculations.
Maximilian GamplLast Updated on
130 billion euros. After long negotiations, the German government agreed on this amount for the coming economic stimulus package. The aim is to provide relief and support in various areas in order to mitigate the economic impact of the Corona crisis and to stimulate the economy in general.
Measures of the Federal Government of Germany
- Child bonus: Families get 300€ per child
- Shortening of insolvency proceedings (max. 3 years)
- Social security contributions will be covered at a maximum of 40 percent until 2021
- Bridging aid for small and medium-sized enterprises (SMEs), especially for hotels, bars, restaurants, etc.
- Doubling the purchase premiums for electric cars
- More independence through own production of medications
- Investments in hospitals
- Premiums for professional trainers
- Financial support for art and culture
- Financial support for municipalities due to lack of trade tax revenue
- Change of the value-added-tax (VAT) rates
Change of VAT rates
In the course of the economic reform, as already mentioned, the VAT rates will be reduced. These changes are scheduled for the period from 1 July 2020 to 31 December 2020. In the process, the standard VAT rate will be reduced from 19% to 16% and the reduced VAT rate from 7% to 5%.
|Before 1 July 2020||1 July 2020 – 31 Dec 2020|
|Standard VAT rate||19 %||16%|
|Reduced VAT rate||7%||5%|
What changes for hellotax clients?
These changes in VAT are naturally taken into account by us and our software and prepared in time.
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Accordingly, nothing will change for you as a customer of us, even all automatically generated reports are adjusted to these changes as soon as they come into effect. Should you still have questions, you are always welcome to contact us.