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Reduction of value added tax in Germany:

In order to restart the German economy after the corona shock of the last few months, the German government adopted a major fiscal stimulus package on June 12, 2020. A central part of these measures is the temporary reduction of the statutory value-added tax within the framework of the regular tax rate from currently 19 % to 16 % and the reduced tax rate from 7 % to 5 %. In principle, entrepreneurs can choose whether to pass on the savings to customers or increase their earnings. However, the new change represents a challenge for accountants, especially due to the extremely short lead time for the changeover.