VAT reduction from 01.07.2020 to 31.12.2020

From 1 July 2020 up to and including 31 December 2020, VAT will fall from 19% to 16%, or from 7% to 5%, for six months. What pleases consumers means considerable changes for online traders (m/f/d).

We summarise for you the points to be changed:

1. note the period from 01.07.2020 to 31.12.2020

You must ensure that all prices are displayed correctly from 1 July 2020. Further, you must ensure that you change the VAT back to the original rates at the turn of the year.

2. showthe correct VAT rate

You must ensure that the correct VAT rate is displayed on all pages of your online shop if you specify a specific VAT rate. The general indication "including turnover tax" or "including VAT" is sufficient in the online shop.

In the online shop, you do not necessarily have to indicate the specific VAT rate. On your invoices, however, the respectively valid VAT rate must be indicated correctly.

If you sell goods on marketplaces such as eBay, Amazon, etc., you must also check there whether the VAT rate is displayed correctly.

3. pay attention to your advertising - warnings are imminent

If you advertise that you will pass on the sales tax reductions to your customers, have the planned advertising and the related price representations and statements checked by us beforehand.

There are numerous pitfalls that could make your advertising inadmissible. In this case, you are threatened with cost-intensive warnings under competition law and further adjustments to the online shop that need to be avoided.

For questions and explanations in connection with the reduction of VAT rates, we are very happy to be at your disposal.

Attorney at Law Michael Ullrich, LL.M. (Information Law)

Specialist lawyer for information technology law