German VAT rate changes in 2023

German VAT changes for 2023 include changes in the VAT rates, the exemption on intra-Community supplies, and reverse charge.

Following the trend of changing VAT rates to combat the recent raise of inflation and economic distress, Germany has released the following measures:

  • Temporary VAT rate reduction to 7% on the supplies of energy: this refers to supplies of gas – natural gas and biogas, via the gas network and supplies of heat via a heating network. The reduced VAT rate applies from 1 October 2022 to 31 March 2024. This measure is accompanied by regulations to simplify the implementation of the reduced rates during the period agreed.
  • Restaurant and catering services have been subject to a reduced VAT rate of 7% since July 2020 as a result of the pandemic crisis. The government agreed on a new extension of the reduced rate for these services until 31 December 2023.
  • Zero-rated supplies of services connected to photovoltaic systems and their main components from January 2023. To apply the 0% VAT rate, the photovoltaic system must be installed on or near residential areas; alternatively, the capacity of the plant must not exceed 30 kW. The supplies of goods and services in scope are zero-rated, meaning that the supplies are subject to 0% of VAT, but the supplier can deduct the VAT incurred on the economic activity – this is the main difference with the exempt supplies. Please consider checking the specific Law details to verify if your supplies and considered within the scope subject to a zero rating.

Check here our VAT rates overview for Germany. Also, here you will find our EU VAT rates overview.

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