German Ministry of Finance Publishes Guidance on Temporary Reduction in VAT Rates in Response to COVID-19

On 4 November 2020, the German Federal Ministry of Finance published a guidance letter on the application of the temporary reduction in the VAT rates implemented in Response to COVID-19. As previously reported, this includes that from 1 July to 31 December 2020, the standard 19% VAT rate is reduced to 16%, and the reduced 7% rate is reduced to 5%. In addition, a reduced rate is applied for restaurant and catering services from 1 July 2020 to 30 June 2021, excluding drinks.

The guidance addr…