Good news for those who shop abroad: Germany will cut their VAT until the end of the year

More than 1.3 million Czechs shop in foreign e-shops each year. 

Samantha Tatro

Written by Samantha Tatro Published on 03.07.2020 08:52:53 (updated on 03.07.2020) Reading time: 1 minute

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Aldi via iStock photo @kontrast-fotodesign
Aldi via iStock photo @kontrast-fotodesign

Great news for Czech expats who shop abroad in Germany.

Following coronavirus, Germany will reduce their value-added tax (VAT) for the rest of 2020 to help support their economy, according to a report in Forbes.

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Germany’s standard VAT rate will fall from 19 percent to 16 percent from July 1 until the end of the year. The reduced rate will go from 7 percent to 5 percent.

It will make a big difference for expats who shop in Germany or shop in German e-shops. According to one report, more than 1.3 million Czechs shop in foreign e-shops each year.

The reduced VAT rate will apply to a number of goods in Germany, including food, drugstore goods, clothing, furniture, electronics, and more. In addition, e-shops will have better prices for Czech as well.

Czechs shop in German e-shops to buy goods for children like diapers; they also buy electronics, appliances and clothing. The VAT reduction will be most notable when Czech residents by electronics and appliances, which tend to be much cheaper and higher quality across the border.

The German Federal Assembly approved the tax cut on Wednesday as part of several measures to support their economy following the coronavirus pandemic.

Once the Czech-German border opened in June, Czech residents began crossing back into Germany to shop at border shops and hypermarkets. Czech residents tend to shop in Germany because of the price and because of the quality.

The move is meant to stimulate the German economy and German shoppers, but Czech consumers will also benefit from the reduced VAT. The reduced VAT will offset some of the exchange rates between the Czech koruna and the Euro.

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Another factor will contribute to Czechs driving to German: this summer will mark the cheapest petrol and diesel prices in the last 20 years.

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