Almost every receipt in Germany carries it, yet plenty of freelancers and small firms still work out the VAT by hand. Two mistakes tend to creep in: the wrong rate, and confusing the net price with the gross price. This guide lays out the rates for 2026, shows both directions of the calculation with real numbers, and explains the one genuine change this year, the reduced rate on restaurant meals.
Three rates, one idea
Germany has three VAT rates in 2026. The standard rate is 19 percent and covers the large majority of goods and services. Alongside it sits the reduced rate of 7 percent, which applies to everyday essentials: food, books, newspapers, local public transport, and admission to theatres, concerts and museums. The third rate is the zero rate of 0 percent, which is narrow and mainly covers the supply and installation of certain solar power systems.
A note on wording. In everyday speech the tax is called Mehrwertsteuer, while the law calls it Umsatzsteuer. They are the same thing. On an invoice you will usually see it abbreviated as USt or MwSt, followed by the percentage.
Adding VAT and stripping it out
The whole exercise comes down to two moves, and neither needs a book of formulas.
Adding VAT means going from the net price to the gross price. You multiply the net amount by 1.19. So 1,000 euros net becomes 1,190 euros gross, and the tax inside it is 190 euros. At the reduced rate you multiply by 1.07: 80 euros net gives 85.60 euros gross and 5.60 euros of tax.
Stripping VAT out is the reverse, back from gross to net. You divide the gross amount by 1.19. A gross figure of 1,190 euros therefore holds exactly 190 euros of VAT and 1,000 euros net. The order matters: you cannot just take 19 percent off the gross amount, because the 19 percent is measured against the smaller net figure. The German VAT calculator does either direction on any amount and any rate.
For a quick mental check there is a fixed divisor. At the standard rate the tax inside a gross figure equals that figure divided by 6.2632, so 119 euros gross holds 19 euros of tax. At the reduced rate you divide by 15.286. If you juggle prices and mark-ups regularly, the percentage calculator and the markup calculator handle the same style of sum.
What changes in 2026: 7 percent on restaurant meals
The one real change this year is in hospitality. Since 1 January 2026 the supply of food in restaurants, cafes and catering carries the reduced rate of 7 percent again, rather than the 19 percent charged before. Drinks are excluded and stay at 19 percent.
The difference shows in a single figure. A meal with a net price of 100 euros cost 119 euros gross in 2025; in 2026 it is 107 euros. The twelve euro gap is the jump from 19 down to 7 percent. For restaurant owners the switch means food and drink now have to be shown separately on a bill, because a different rate applies to each.
Zero-rated is not the same as exempt
Two terms sound alike and mean something quite different for a business. Under the zero rate in Section 12(3) of the VAT Act the sale is taxable at 0 percent, but the trader keeps the input tax deduction, so the VAT on their own purchases can be reclaimed. True exemptions under Section 4, such as many financial and insurance services or medical treatment, generally block the input tax deduction. To the customer at the till both look identical because no tax is shown. For the business, the difference decides whether the VAT it paid comes back or stays a cost.
The small business rule
A trader with low turnover can skip VAT altogether. Under the small business rule in Section 19 of the VAT Act, a Kleinunternehmer shows no VAT on invoices and pays none over. Since 2025 two limits apply: prior-year turnover must not have topped 25,000 euros, and current-year turnover must stay under 100,000 euros. If the 100,000 euro line is crossed mid-year, the rule ends from that point and VAT must be charged. The price of the simplicity is the lost input tax deduction: charge no VAT and you reclaim none either.
The 2026 rates at a glance
| Rate | Level | Applies to, among others |
|---|---|---|
| Standard rate | 19% | most goods and services, drinks in hospitality |
| Reduced rate | 7% | food, books, newspapers, transport, admission tickets, restaurant meals from 2026 |
| Zero rate | 0% | supply and installation of certain solar power systems |
FAQ
What is the VAT rate in Germany in 2026? The standard rate is unchanged at 19 percent and the reduced rate is 7 percent. What is new from 1 January 2026 is that restaurant meals fall under the reduced 7 percent rate again.
How do I strip VAT out of a gross amount? Divide the gross figure by 1.19 at the standard rate, or by 1.07 at the reduced rate. A gross 119 euros then holds 19 euros of tax and 100 euros net. Taking a flat 19 percent off the gross amount gives too high a result.
Does the reduced rate cover drinks in a restaurant? No. The reduced 7 percent rate from 2026 applies to food only. Drinks stay at the standard 19 percent, which is why they have to be listed separately on the bill.
What is the difference between Mehrwertsteuer and Umsatzsteuer? They are the same tax. Umsatzsteuer is the legal term, Mehrwertsteuer the everyday name. Invoices usually show the abbreviation USt or MwSt.
When does a small business have to charge VAT? As long as prior-year turnover stays under 25,000 euros and current-year turnover under 100,000 euros, you can use the small business rule in Section 19 and show no VAT. Cross 100,000 euros during the year and standard taxation applies from that turnover onward.
Sources
- Federal Ministry of Justice, Section 12 VAT Act, tax rates.
- Federal Ministry of Justice, Section 19 VAT Act, small business taxation.
- Federal Ministry of Finance, Umsatzsteuer.