The german vat law, based on the eu vat directive, is contained within the value added tax act of 1980 umsatzsteuergesetz ustg. Among the products benefitting from the 7% tax rate are foodstuff, magazines and books. No vat is chargeable on goods which would normally be zerorated or exempt when supplied in the uk for example, books, childrens clothing and some food. The eu has standard rules on vat, but these rules may be applied differently in each eu country. The rate of valueadded tax rate generally in force in germany is 19%. Local name for vat number in germany is umsatzsteueridentifikationsnummer. Current vat rate in germany is 19 % for most goods and services. This statistic shows the results of a survey on vat for books and e books in germany in 2016 and 2017. The eu also permits a maximum of two reduced rates, the lowest of which must be 5% or above. View a list of recent articles and books in our collection on vat. Germany slashes audiobook vat, pushes for ebooks cut the. The german value added tax umsatzsteuer is paid by companies after being levied on the consumers buying the respective products or services.
View more information on other countries, or find out more about vat germany vat. Reduced rate of vat for electronic publications 12 2 no. Whilst germany follows the eu rules on vat compliance, it is still free to set its own standard upper vat rate. The sale of digital products and services ess electronically supplied services will be taxable in the country associated with the location of the customer. Germany have committed to cut the vat rate applicable to ebooks from 19% to 7% and hopes to implement this from 1 january 2020.
The 28 member states are otherwise free to set their standard vat rates. View a list of tax annuals in our collection on vat. Some items are standardrated such as exercise books, letterheads, posters vat notice 70110 clothing and footwear, protective and safety equipment clothing and footwear. The german government has cut vat on audiobooks to 7%, and the rate on ebooks might soon follow. Certain goods and services are exempted from vat by law. The vat rate chargeable for printing depends on the publicationproduct being printed. In general, input vat incurred in the course of a business in hotel expenses, restaurants, attendance to conferences, telephone, taxi or entertainment is 100% deductible. Generally, goods and services that serve basic needs or the public interest enjoy a lower vat rate in germany. Vat between the uk and germany brighton accountants. The current rate of vat in germany is 19%, enforced from 1st january, 2007. The current vat directive applies to all 28 member states of the european union, and it governs the rules on vat compliance, and in some part, covers the setting of vat rates.
Other countries are already ahead of germany on the issue. If mwst is charged, the uk business cannot reclaim it on their uk vat return or by a direct claim to the german tax authorities. This follows the eu councils proposal to allow eu member states to cut rates on electronic publications to match their printed equivalents, please click here for the full article. Jan 03, 2019 this statistic shows the results of a survey on vat for books and e books in germany in 2016 and 2017. This change will directly benefit the electronic publishers from the member states. Including vat value added tax rates for spain, france, belgium, south korea, japan, pakistan, singapore and more. On 31 july 2019, the german federal cabinet approved the governments draft bill. Vat rates and minimum purchases required to qualify for refunds. Print books and periodicals have been subject to a special vat reductiona move other. Luxembourg levies a 17% standard vat but only 3% for books. Standard vat rate is 19% and reduced one is only 7%. Some countries have variations on this, including a third.
For sellers who are not obliged to be tax registered in germany, marketplaces can obtain a declaration confirming relevant facts and circumstances that show they exempt the sellers from tax registration. Vat rates on books and ebooks around the world publishing. The council has worked on a proposal to amend the existing eu vat directive in order to allow member states to apply, if they so wish, lower vat rates to epublications such as electronic books, newspapers and periodicals the draft proposal is part of the eus wider effort to modernise value added tax for the digital economy in the context of the eus digital single. The lower vat rate of 9% applies to a number of products and services, such as food products, medicines, books, newspapers and magazines and paint and plaster work on homes. Reduced vat rates for electronic books, newspapers and. The uk government is being urged to axe the illogical and unfair 20% tax currently imposed on ebooks, while print books remain exempt. However, the standard german vat rate, currently 19%, is still set by the german state. Information on vat in germany and german vat rates mehrwertsteuer.
The average vatgst rate applied to printed books is 5. For example, regular potatoes are subject to a 7 percent vat, while sweet potatoes are taxed at 19 percent. Suppliers of goods or services vat registered in german must charge the appropriate vat rate, and collect the tax for onward payment to the german tax authorities through a vat filling see. Dec 21, 2019 germany plans on lowering the vat on ebooks from 19% to 7% starting in january. Since the european council agreed to allow member states to apply a reduced vat rate to electronic publications in october 2018 1, vat rates for ebooks have changed fast in eu countries 2019 has witnessed several vat rate updates for epublications where numerous countries have reduced the levy on ebooks, so in order to clarify the current situation we. The current vat directive applies to all 28 member states of the european union, and it governs the rules on vat compliance, and in some part covers the setting of vat rates. Germany plans on lowering the vat on ebooks from 19% to 7% starting in january. May 01, 2014 the german government has cut vat on audiobooks to 7%, and the rate on ebooks might soon follow. Reduced vat rates for electronic books, newspapers and periodicals introduction the council has worked on a proposal to amend the existing eu vat directive in order to allow member states to apply, if they so wish, lower vat rates to epublications such as electronic books, newspapers and periodicals. A multiyear campaign to get ebooks taxed at the same rate as print books in the eu has finally paid off. Only four countries france, italy, iceland, turkey apply reduced vat gst to e. Examples are food, books, newspapers, public transport, and cultural activities.
Jul 03, 2019 since the european council agreed to allow member states to apply a reduced vat rate to electronic publications in october 2018 1, vat rates for ebooks have changed fast in eu countries. Reducing vat on ebooks, to match printed book rates. The rate of vat is set according to the parameters of the european union value added tax system. This follows many other member states in aligning the vat rates of electronic books and publications with their printed counterparts and once passed will take effect on 1 january 2020. Receipt of services taxable in germany from suppliers in other countries receipt of other reverse charge services taxable in germany vat rates 7 %. Hungary applies the highest vat rate on ebooks 27%. Vat rates vat rates may vary depending on the destination country and product type. Sudden and unexpected reduced vat changes on electronic publications have added complexity for digital businesses when operating in the eu. In 2017, 73 percent of respondents agreed with the statement that the vat for e books should. There is reduced vat rate 7% for some goods and services. Mar 04, 2020 the vat rate for ebooks and similar electronic products has been reduced to 7% according to the annual tax act 2019 that was passed by the german parliament on 7 november 2019 and later approved by the german federal council on 29 november 2019. Vat rates may vary depending on the destination country and items being delivered. This statistic shows the results of a survey on vat for books and ebooks in germany in 2016 and 2017.
Borsenblatt reports that from yesterday, december 18, the vat rate for digital books fell from 19% to 7%. In the united kingdom, for example, changes were announced on april 30 to completely scrap the vat rate on epublications and went into effect on may 1. Germany draws up its rules according to laws or directives issued from brussels by the eu. The german government applies it on the sale of goods and services. While the standard vat varies among eu member states, books generally get a lower rate.
To find out how you can borrow books from the library please see our guide to book loans. The regular vat rate is 19% for goods and services like electronics, clothing and shoes, toys, etc. The decision was made by the german coalition governments executive board on tuesday 29th. Value added tax recovery time in germany is 34 months. The current standard vat rate in germany is 19% and it was introduced. Denmark applies the highest vat rate on printed books 25%. Eu lowers vat for ebooks to match print books quartz. Currently, ebooks have to be taxed at an eu minimum standard rate of 15%, whereas member states are free to charge the reduced rate of at least 5% and in some cases, even zerorates. Germany, 19%, 7% books, digital books, audiobooks, digital newspaper and subscriptions, eperiodicals and subscriptions, kindle electronic books. As a result, the german vat e books and publications rate will fall from the standard rate of 19% to the reduced rate of 7%. You can obtain copies of articles or extracts of books and reports by post, fax or email through our document supply. This follows the eu councils proposal to allow eu member states to cut rates on electronic publications to match their printed equivalents, please click here for the full article find out more about vat in germany. Jun 29, 2010 the current rate of vat in germany is 19%, enforced from 1st january, 2007. Since the european council agreed to allow member states to apply a reduced vat rate to electronic publications in october 2018 1, vat rates for ebooks have changed fast in eu countries 2019 has witnessed several vat rate updates for epublications where numerous countries have reduced the levy on ebooks, so in order to clarify the current situation we provide the following summary with.
The international publishers association ipa and the federation of european publishers fep have released a report detailing the vat rates on print and digital books around the world, which reveals wide contrasts between print and digital, as well as between nations and between regions. The value added tax vat is an indirect tax applied for the production of goods and rendered services to an end user. Printed matter liable at the zero rate the zerorate of vat applies to printed books and booklets including. Foreign ecommerce sellers obligation to remit vat in germany under certain conditions, ecommerce sellers are obliged to remit vat when selling goods to customers in germany. For example, the printing of books is zero rated, while the printing of newspapers is liable to vat at the second reduced rate. Foreign entreprisers interested in starting a company in germany must comply with the vat system in this country. For other products and services you will pay the general vat rate of 21%. Jul 20, 2015 denmark applies the highest vat rate on printed books 25%. Also included in the report is an appeal by ipa policy director jose borghino that countries consider a zerorate. The german vat ebooks and publications rate will fall from the standard rate of 19% to the reduced rate of 7% from january 2020. The german government has cut vat on audiobooks to 7%, and the rate on e books might soon follow.
Section 22 f of the german vat code requires marketplaces to verify if sellers are tax registered in germany by collecting tax certificates. Kenya abolished vat on menstrual products as early as 2011. Bundeszentralamt fur steuern or federal central tax office, germanys tax agency. Businesses are then responsible for reporting it to the government. The eu sets the broad vat rules through european vat directives, and has set the minimum standard vat rate at 15%. May 12, 2017 some items are standardrated such as exercise books, letterheads, posters vat notice 70110 clothing and footwear, protective and safety equipment clothing and footwear.
Germany plans to cut vat on ebooks to 7% fiscal solutions. This is likely to require a vat registration in germany. Germany imposes a valueadded tax vat of either 19% or a reduced rate of 7% on most itemsservices purchased. Dec 15, 2016 value added tax vat rates per country.
If you do business in other countries from your base in the netherlands, the 0% vat rate may apply. That means the sticker price already includes either the 19% or 7% vat. That means the sticker price already includes either the. Such changes create a series of compliance headaches. Germany slashes audiobook vat, pushes for ebooks cut. Germany draws up its rules based on laws, or directives, issued from brussels by the eu. This new directive will give member states the option to align vat on digital content with printed matter, said the rapporteur tom vandenkendelaere epp, be.
The vat rate for ebooks and similar electronic products has been reduced to 7% according to the annual tax act 2019 that was passed by the german parliament on 7 november 2019 and later approved by the german federal council on 29 november 2019. Vat isnt paid by businesses instead, its charged to consumers in the price of goods, and collected by businesses, making it an indirect tax. Any compulsory extra charges for freight, shipping, postage or delivery should be charged at the same rate of vat as the rest of the items in that. As a result, the german vat ebooks and publications rate will fall from the standard rate of 19% to the reduced rate of 7%. In germany, a reduced tax of 7% is collected from the sale of particular items such as foods, magazines and books. A vat registered uk business importing goods from germany should give the german supplier its uk vat registration number including the gb prefix so that german mwst does not get charged. Vat registration in germany easy vat registration in. They may be printed in any language or characters including braille or. As a result, the german vat ebooks and publications rate will fall from.
Application of reduced vat rates by the member states to the categories of goods and services contained in annex iii of vat directive. If there is a conflict between the german vat law and the eu vat directives, then the eu rules prevail. Oct 03, 2018 while the standard vat varies among eu member states, books generally get a lower rate. Sales of digital products and services including kindle content, ebooks, amazon. No vat is chargeable on goods which would normally be zerorated or exempt when supplied in the uk for example, books, childrens clothing and some food items.
Vat rates for ebooks so far 2019 global vat compliance. This vat reduction was made possible by the passing of the vat directive from 2018, which created the possibility of. Dec 05, 2018 the uk government is being urged to axe the illogical and unfair 20% tax currently imposed on ebooks, while print books remain exempt, after european legislation cleared the way for this to. There is also a reduced rate of 7% for foodstuffs, books, medical.
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