German VAT rates on multiple VAT rate supplies

Fri 21st Feb 2014

The German Federal Ministry of Finance, Bundesministerium der Finanzen (BMF), has clarified the procedures for German VAT rates on a single supply where there are different VAT rates applicable.

Allocation of German VAT on mixed supplies

Where a supplier is offering for a single price goods with multiple VAT rates attached, the company must take the most appropriate calculation methodology to apportion the cost to the VAT rates for calculating the total VAT charge.  Typically, using the separate sales values of the components should be used.

The guidance has been issued following a court case last year at the Bundesfinanhof, the Federal Fiscal Court.

German VAT is applicable at 19% (having risen from 16% in 2007).  There is also  a reduced VAT rate of 7% on: foodstuffs; medical supplies; public transport; books; newspapers; hotels; admission to cultural or sporting events; and dental care.