Time is running out for bargain hunters

Receipt: Until December 31, the value added tax is 16 or 5 percent instead of 19 or 7 percent, depending on the product.
Image: dpa

From January 1st, the normal, higher VAT will apply again. What should customers pay attention to now when they want to buy something expensive or hire craftsmen?

D.he Corona year 2020 will only end in three months, but those who still want to benefit from the VAT reduced from 19 to 16 percent for larger purchases should hurry. From January 1st the higher rates will apply again. That can be expensive, because valuable goods such as cars, jewelry or luxury watches cannot usually be taken straight away from the dealer. Instead, after ordering, you have to wait for the delivery or completion. The longer this takes, the greater the risk that customers will have to pay full VAT on the net price again. This can also happen in the case of craftsmen’s orders that drag on over the turn of the year.

In the case of larger purchases, the temporary tax rate cut makes a noticeable difference, so that some consumers base their purchase decision accordingly. So it was also intended in terms of economic policy: In order to mitigate the negative consequences of the corona pandemic for citizens and companies, the federal government lowered VAT from 19 to 16 percent for the period from July 1 to December 31 of this year. For the same period, the reduced VAT rate was also reduced from 7 to 5 percent. This applies to certain basic foodstuffs, books and newspapers, while the standard rate applies to the purchase of cars or jewelry.


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