Update: On 20.11.2020, an initiative for the extension of the reduced VAT of 5% in the areas of gastronomy, hotels, culture until 31.12.2021 was submitted to parliament.
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)
1. Beneficiary sectors
In the gastronomy sector, the reduced rate of 5% will be applied to all food and beverages (both alcoholic and non-alcoholic). This applies to gastronomy areas for which a trade licence for the catering trade (§ 111 Paragraph 1 GewO 1994) is required, but also to activities for which a certificate of competence is not required according to § 111 Paragraph 2 GewO 1994.
In addition, the agricultural catering trade (alpine pasture bar, "Buschenschank") is also covered. In this case, the interim tax for the beverages in question is not applicable.
The reduced tax rate of 5 % should apply in particular to the following services:
- Imports and supplies (under certain conditions) of works of art (paintings, original engravings, sculptures, tapestries, textiles)
- Turnover from the activity as an artist
- Operation of a theatre (theatre performances)
- Film screenings
- Music and singing performances
- Running a museum, a botanical or zoological garden and a nature park
The reduced tax rate of 5 % shall apply in particular to the following services:
- Supplies, imports and intra-Community acquisitions of books, brochures, prints, newspapers and other periodicals, picture albums, printed or hand-written music, cartographic products of all kinds
- Imports and supplies of photographs taken by the artist, subject to certain conditions
Previously favoured non-profit, charitable or church organisations and associations also fall within the scope of the reduced VAT rate of 5 %, unless the corresponding activities are tax-exempt anyway.
The amendment will enter into force (retroactively) on 1 July 2020 and will apply to sales carried out in the period 1 July to 31 December 2020. You will find the initiative application including the reasoning on the
3. Adaptation of the cash register system and the issuing of receipts
In order to avoid subsequent correction of invoices and recovery of VAT amounts, the new reduced VAT rate of 5 % should be deposited and charged in the cash register system as early as 1 July 2020.
According to information from the Ministry of Finance, the following applies with regard to the creation of receipts: Turnover subject to the reduced VAT rate must be shown accordingly on the voucher from 1 July 2020. In order to meet the legal requirements, however, it is sufficient for this identification to be made by means of a corresponding text annotation on the receipt, or a manual correction or correction by means of a stamp on the receipt.
Detailed information on the adaptation of the cash register system and the issuing of receipts can be found on the homepage of the Federal Ministry of Finance (BMF).
Both the final legislation and the expected further adjustments by the tax authorities remain to be seen.
Our experts Claudia Modarressy and Christian Weber will be happy to support you in your individual assessment of whether your company's turnover falls within the scope of the reduced VAT rate at all and will also be happy to advise you on the measures to be taken!