Adjustment of sales tax as of 01.07.2020

On 29.06.2020, the Bundestag and Bundesrat decided to reduce the sales tax from 19% to 16% and from 7% to 5% respectively for 6 months from 01.07.2020. In the meantime, the corresponding letter from the Federal Ministry of Finance containing the obligatory implementation specifications has been submitted.

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The tax rate to be applied is based on the date on which the service is provided - the invoice date is irrelevant. For license invoices, the date of delivery of the license key is therefore decisive, for services, the period within which the services were provided. In the case of contracts for continuous services, such as our software service contracts, the date of performance is the end date of the respective contract billing period (paragraph 3.3.1 RZ 24 of the BMF letter). This results in the necessity of subsequent invoice correction.

Correction of software service contract invoices

In accordance with the exception for the B2B sector (paragraph 3.12 of the BMF letter), invoices whose accounting period ends before 01.08.2020 remain valid and do not need to be corrected. Therefore, in the coming weeks and months we will credit all software service contracts whose billing period ends between 01.08. and 31.12.2020 and recalculate them with 16% VAT.

You can download the BMF letter here:

BMF letter     Back

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Patrick Plenz marketing and corporate communications

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