The Federal Ministry of Finance have announced that the German government have approved the VAT rate cuts as part of the stimulus package, as previously detailed in our story of 4th June 2020. The VAT rate cut is due to come into force as of 1 July 2020 and last until 31 December 2020.
All measures of the financial stimulus package including the VAT rate cuts are still to be formally approved in Parliament, with the 29th June 2020 set aside for parliament sessions to do so.
The Federal Ministry of Finance have also published a draft version of the administrative guidelines on the VAT rate changes planned which include how to apply the correct VAT rate to goods and services in terms of the relevant tax point.
Whilst the new rates have yet to be approved by parliament, this is very much likely to go ahead, so businesses should be planning ahead for eventual changes to their systems.