ᐅ Reduced value-added tax until the end of 2020. How to proceed with invoices?

Hello everyone,

The coalition government reduced the VAT from 19% to 16% from July 1, 2020, to December 31, 2020. This should also be interesting for homeowners.

However, I have some questions about how this works in practice. Does this only apply to invoices issued by the end of the year? Or do the payments also have to be made by then?

Is it possible to arrange with contractors to issue the invoice in December 2020, but I pay only in February after the work is completed? In that case, do I still pay the reduced VAT rate, or is the invoice amount 3% too low and I have to pay the difference in February?

What do you think?

Best regards

I’m not allowed to include any links... but a tax advisor wrote that a clearly defined service must be completed and accepted by the end of the “relevant” period – including the start of the warranty period. So, the way you are thinking it through will not work.

So, only trades that were completed and paid for by 12/31/2020 are included?

I am not a tax advisor; I am only sharing what I have read from the tax tips regarding the last tax increase. When you pay does not matter, but the clearly defined service must be completed and accepted. Some tasks can be easily separated (e.g., fence construction and planting), while others cannot. I would recommend seeking professional advice on this. Surely, there will be helpful tax advisors or financial advice websites available in the coming days.

I am supposed to pay for 12% completion of the basement slab, 12% completion of the basement level, and 22% completion of the shell construction.

All of this should take place at the specified time. Everything should be clearly finished and distinguishable. Just my layperson’s opinion...?

The industry of tax advisors and lawyers is definitely secure.