Value added tax

The general tax rate, to which most sales are subject, is 19 percent, and the reduced tax rate is 7 percent. The two tax rates are specified in § 12 UStG ( http://www.gesetze-im-internet.de/ustg_1980/__12.html ).

The reduced tax rate applies in particular to the supply, import and intra-Community acquisition (purchase from other EU countries) of many foodstuffs. Almost all beverages, as well as numerous restaurant sales, are exempt. Ready-to-eat meals can be supplied both as part of a supply taxed at a reduced rate, if applicable, and as part of another service not taxed at a reduced rate.

In particular, the following products and services are taxed at 7 percent:

• many agricultural products
• many books, newspapers and magazines
• some medical and nursing goods (e.g., wheelchairs, prostheses, and other "body substitutes")
• self-created works of art (e.g., personal drawings, paintings, and sculptures).
• dental services
• entrance fees for cultural events
• services provided by charitable, benevolent and church institutions
• local public transport for journeys of up to 50 km
• short-term overnight stays
• entrance fees for swimming pools
• the granting, transfer and exercise of rights arising from copyright law
• film screenings

A detailed list of all goods that are taxed at a reduced rate can be found in Annex 2 to Section 12 (2) of the VAT Act ( http://www.gesetze-im-internet.de/ustg_1980/anlage_2.html ).

The above list can only provide a rough overview of the goods and services concerned. Since the distinction between reduced and general tax rates is very detailed in detail, the legal basis should be checked again in any case before invoicing at the reduced tax rate (if necessary, please consult a tax advisor).