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In the following, we will provide you with an overview of the VAT changes associated with the e-commerce package, which, due to COVID-19, will now only come into force on July 1, 2021 (instead of originally on January 1, 2021).

In an information letter (GZ 2020-0.457.789 dated 20.07.2020), the Federal Ministry of Finance (BMF) answered further detailed questions on the temporary introduction of the reduced VAT rate of 5% from 1 July 2020 in the restaurant, hotel, cultural and publication sectors.

The temporary introduction of a 5 % VAT rate for areas particularly affected by COVID-19 was unanimously approved by the National Council on Tuesday, 30 June 2020. An amendment - also adopted unanimously - also clarified and extended the areas benefiting.

In order to support the areas of gastronomy, culture and publications, which are particularly affected by COVID-19, an initiative motion on the temporary introduction of a reduced VAT rate of 5% was submitted to the National Council on 18 June 2020. The National Council is expected to pass a resolution on this on 30 June 2020 and the Federal Council on 2 July 2020. We have compiled some information on this subject. (Status: 24.06.2020)

The German Government has agreed on a business activity support programme, which consists of 57 measures and contains a volume of EUR 130 billion. The agreement stipulates, that the VAT rates shall be reduced from 19 % to 16% respectively from 7% to 5 %. The reduced VAT rates shall be applied between July 1, 2020 and December 31, 2020.

Due to a change in the Austrian VAT Code the following two requirements must be additionally met in order to apply the zero VAT rate to intra-Community supplies of goods: