In Germany, the Value-Added Tax (VAT) known as Mehrwertsteuer (MwSt.) is applied to most goods and services. It is a consumption tax included in the final retail price, meaning customers do not need to calculate it separately. Being aware of VAT rates can help shoppers make informed purchasing decisions.

Standard VAT Rate: 19%
Most goods and services in Germany are taxed at a standard VAT rate of 19%. This includes clothing, electronics, furniture, cars, fuel, and non-essential food and beverages like soft drinks and alcohol. Entertainment and leisure services are also subject to this tax. The 19% VAT is automatically added to the final price. Customers do not need to calculate it separately. This tax applies to both in-store and online purchases.

Reduced VAT Rate: 7%
A lower VAT rate of 7% applies to essential goods and cultural products. Basic food items such as milk, bread, fresh fruits, and vegetables qualify for this rate. Books, newspapers, magazines, and public transportation are also included. Certain medical supplies, flowers, and artwork benefit from the lower tax. The reduced rate helps keep essential goods more affordable. It is designed to ease the financial burden on consumers.

VAT Inclusion in Prices
In Germany, VAT is always included in the displayed price of goods and services. Unlike in some countries where tax is added at checkout, German pricing ensures full transparency. Shoppers see the final price upfront without any surprises. This simplifies budgeting and makes shopping easier. Whether buying in-store or online, the total price already includes VAT. Customers do not need to worry about additional tax calculations. This system makes Germany’s pricing structure straightforward and consumer-friendly.

VAT Refund for Tourists
Non-EU visitors may be eligible for a VAT refund on certain purchases. To qualify, the minimum purchase amount per store is usually €50. The retailer must provide a tax-free form at the time of purchase. Before leaving the EU, tourists must get this form stamped at customs. Refunds can be claimed at refund offices or through services like Global Blue. The process helps travelers save money and make shopping more cost-effective.