Almost everything you buy in Germany includes VAT, and if you run a business or work freelance you will need to add it to your own invoices. Germany has two rates: a standard rate for most things and a reduced rate for a list of essentials. This guide explains both for 2026, in English, and shows how to add VAT to a price or take it out, with figures from the Germany VAT calculator.
The short answer
The standard rate of German VAT is 19%. A reduced rate of 7% applies to most food, books and newspapers, restaurant meals (but not drinks), hotel stays, local public transport and tickets for theatres, concerts and museums.Federal Ministry of Justice
To add VAT, multiply the net price by the rate and add the result. To remove it, divide the gross price by one plus the rate. For a €100 net price at the standard rate, the price including VAT is €119.00.
Umsatzsteuer, Mehrwertsteuer, MwSt
You will see several German names for the same tax. The legal name is Umsatzsteuer (USt), literally “turnover tax”, and the law is the Umsatzsteuergesetz (UStG). In everyday language, and on most shop receipts, it is called Mehrwertsteuer (MwSt), which means value added tax. They are the same thing. On an invoice you may also see “netto” for the price before VAT and “brutto” for the price including it.
Germany’s VAT works like VAT elsewhere in the European Union. Businesses charge it on their sales, deduct the VAT they paid on their own business purchases (Vorsteuer), and pay the difference to the tax office (Finanzamt). The final consumer bears the tax.
What is taxed at 19%
The standard rate is the default. Anything not covered by a reduced rate or an exemption is taxed at 19% of the net price. That includes, for example:
- most goods and services in general;
- electronics, clothing and cars;
- professional services such as consulting, design or software development;
- drinks served in restaurants and cafés, even when the meal they come with is at the reduced rate.
What is taxed at 7%
The reduced rate of 7% covers a defined list. The main items are:
- most food, as listed in Annex 2 of the VAT Act;Federal Ministry of Justice
- books, newspapers and magazines, including e-books and e-newspapers;
- restaurant and catering meals, but not the drinks served with them;
- short-term accommodation, such as hotel stays;
- local public transport and taxis within a town or over short distances;
- tickets for theatres, concerts and museums.
The details can be surprisingly fine. Whether a product counts as food under Annex 2, or a service as accommodation rather than something else, decides the rate, and the rules don’t always follow everyday language. The calculator lets you choose either rate, but it does not decide which one applies to a particular sale.
Adding VAT to a net price
If you know the price before VAT (the net price), multiply it by the rate to get the VAT, then add the two together.
| Net price | VAT at the standard rate | Gross at the standard rate | VAT at the reduced rate | Gross at the reduced rate |
|---|---|---|---|---|
| €100 | €19.00 | €119.00 | €7.00 | €107.00 |
| €1,000 | €190.00 | €1,190.00 | €70.00 | €1,070.00 |
| €2,500 | €475.00 | €2,975.00 | €175.00 | €2,675.00 |
| Line | Amount |
|---|---|
| Net price (netto) | €1,000.00 |
| VAT (Umsatzsteuer) at 19% | €190.00 |
| Gross price (brutto) | €1,190.00 |
Freelancers and businesses usually quote prices to other businesses net, because a business customer can normally reclaim the VAT. Prices for consumers are normally shown including VAT, so a price tag in a German shop is already the gross price.
Taking VAT out of a gross price
If you have a price that includes VAT (the gross price) and want to know the net price, divide the gross by one plus the rate. The VAT is the gross minus the net. The same sum lets you check a receipt: the VAT printed on it should equal the gross amount less the net amount worked out this way, give or take a cent of rounding.
| Gross price | Net at the standard rate | VAT inside it | Net at the reduced rate | VAT inside it |
|---|---|---|---|---|
| €50 | €42.02 | €7.98 | €46.73 | €3.27 |
| €100 | €84.03 | €15.97 | €93.46 | €6.54 |
| €1,190 | €1,000.00 | €190.00 | €1,112.15 | €77.85 |
A common mistake is to take the rate straight off the gross price. That removes too much, because the VAT was charged on the net price, not on the gross. On a €100 gross price at the standard rate, the VAT inside is €15.97, not €19.00.
A restaurant bill with both rates
A restaurant bill is the everyday case where both rates appear together. Food is at the reduced rate and drinks at the standard rate, so the VAT has to be worked out separately for each part. Say a bill comes to €40 for food and €12 for drinks, both including VAT. The food contains €2.62 of VAT and the drinks €1.92. A German receipt usually lists the two rates on separate lines for exactly this reason.
The same split applies whenever one purchase mixes items at different rates, such as a supermarket shop with food and household goods.
VAT on invoices
If you charge VAT, your invoice must show it properly. Among other details, a German invoice must show the net amount broken down by rate, the rate that applies, and the VAT amount, or a note that the sale is exempt. It also needs your tax number or VAT identification number, a unique invoice number and the date.Federal Ministry of Justice
Round VAT to the cent on each invoice, as the calculator does. If an invoice has several items at the same rate, it is usual to add the net amounts first and work out the VAT on the total.
Reclaiming VAT on business purchases
If you are registered for VAT, the VAT you pay on purchases for your business is normally not a cost. You deduct it as input VAT (Vorsteuer) from the VAT you charge your own customers, and pay the tax office only the difference. To do that you need a proper invoice from the supplier that shows the VAT.Federal Ministry of Justice
Say you are a freelancer and buy a laptop for your work for €1,190 including VAT at the standard rate. The VAT inside that price is €190.00, so the laptop’s real cost to your business is the net price of €1,000.00. That is why business prices are compared net. For a private purchase there is nothing to reclaim, and the gross price is what you pay.
Some costs only partly qualify, for example a phone or car used privately as well as for work, and in a few cases the deduction is ruled out entirely. Keep every purchase invoice with your records: without a proper one, the tax office can refuse the deduction.
Small businesses and exempt supplies
Very small businesses don’t charge VAT under the small-business rule (Kleinunternehmerregelung) in § 19 of the VAT Act, as long as their turnover stays below limits set in the law, unless they choose to opt out of the rule.Federal Ministry of Justice The limits and conditions change from time to time, so this guide does not quote them: for the current rules, see the Federal Ministry of Finance or ask your tax office. A business using the rule also can’t reclaim VAT on its purchases.
Some supplies are exempt altogether rather than taxed at a reduced rate. Examples include most rentals of land and buildings, other than short-term accommodation, and medical treatment by doctors and other health professionals.Federal Ministry of Justice Sales between businesses in different EU countries follow their own rules. The calculator covers only the two German rates and does not handle exemptions, the zero rate for certain solar installations or cross-border sales.
Work out German VAT
Choose whether to add or remove VAT, enter the amount and pick the rate. The calculator shows the net price, the VAT and the gross price at both rates side by side.
€119.00
- VAT (Umsatzsteuer)
- €19.00
- Price excluding VAT (netto)
- €100.00
- Rate
- 19%
- Which rate applies depends on exactly what is supplied (Annex 2 of the VAT Act lists the reduced-rate goods). Restaurant meals are at 7%, drinks served with them at 19%.
Price including VAT (brutto): €119.00 €19.00 VAT at 19%
Show the breakdown
| Line | Amount |
|---|---|
| Net price (netto) | €100.00 |
| VAT (Umsatzsteuer) at 19% | €19.00 |
| Gross price (brutto) | €119.00 |
VAT is separate from income tax, which you pay on your profit or salary. For that side, see the German income tax rates guide and the Germany income tax calculator. If you are employed, the Germany net salary guide explains your payslip.
These figures use the 2026 rates in § 12 of the German VAT Act. They are estimates, not tax advice; which rate applies to a sale depends on the law and its detailed rules.