For the last year one of the main topics for German consumers has been the planned rise in the VAT (MwSt) level from 16% to 19% from 1st January 2007.
The Government has been accused of damaging the economy, just as it was starting to get going again. In December, a lot of fuss was made to persuade consumers to spend their money fast, before the 19% took hold. Actually, unless you are buying something big, like a car, then it will only make a few cents difference and a lot of basic items such as food and books are not affected any, as they have a lower VAT rate of 7%.
Well January came and now a lot of shops are offering to “pay to VAT” for their customers in January – effectively leaving prices alone but including the 19% instead of 16%. I wonder how long this will last?
I myself have rounded up my hourly rate for IT services, but have rounded down my travel costs to try and keep the figures simple and yet not overcharge my customers.
One of the best pieces of advice I read was in our television magazine, TV14 – if you went to a party on New Year’s Eve you could pay 16% for a meal (starting before midnight), 7% for a taxi afterwards (up to 50km) and 19% the next morning for your hotel room!
About Graham
[…] their turnover – resulting in the long run for more income for the state. In my opinion, increasing the VAT rate a few years ago was not the right […]