German VAT Rates 2026: Rates, Calculation and Examples

In Brief

• Mehrwertsteuer = Umsatzsteuer: the same tax, two German names. "Umsatzsteuer" is the official term, "Mehrwertsteuer" the colloquial one. Both translate to VAT.
• Two rates in 2026: the standard rate of 19 % and the reduced rate of 7 % (§ 12 UStG) — both unchanged.
• 7 % applies to basic foods, books, newspapers, and local transport, among others.
• New since 1 January 2026: food in restaurants and cafés is permanently taxed at 7 % (drinks stay at 19 %).
• Quick maths: gross = net × 1.19. From the gross, you extract the VAT contained in it with 19/119 — so €100 gross contains just €15.97 in VAT, not €19.

Mehrwertsteuer vs. Umsatzsteuer: Two Names, One Tax

The short answer: there is no difference. Mehrwertsteuer and Umsatzsteuer denote one and the same tax. In the VAT Act (Umsatzsteuergesetz, UStG) only the term "Umsatzsteuer" appears — the word "Mehrwertsteuer" is nowhere in it. "Mehrwertsteuer" is the colloquial term, derived from the European value-added-tax system, because the tax ultimately only burdens the "added value" (Mehrwert) at each economic stage.

In everyday life you meet both abbreviations: a receipt usually says "MwSt.", a business invoice often "USt." — both are correct and equivalent. The tax authorities use "Umsatzsteuer", while retail tends to use "Mehrwertsteuer" toward consumers. For how to handle the tax as a business — input-VAT deduction, VAT ID, preliminary return — see the guide to VAT for businesses.

German VAT Rates 2026: 19 % and 7 %

Germany has two regular VAT rates, both set out in § 12 UStG and unchanged in 2026:

• Standard rate 19 % — applies to the vast majority of goods and services.
• Reduced rate 7 % — applies to selected everyday and cultural goods.

This is how the rate affects the price:

There is also a zero rate (0 %) for certain photovoltaic systems and a flat average rate for farmers and foresters (2026: 7.8 %). For most of the self-employed, though, only the 19 % and 7 % are relevant.

Which Products Have 7 %?

The reduced rate of 7 % is meant to relieve essential goods and cultural goods. These mainly include:

It gets curious at the edges: pet food carries 7 %, but baby food 19 %. Cow's milk is taxed at 7 %, an oat or soy drink at 19 %. And tap water costs 7 % tax, bottled mineral water 19 %. These distinctions regularly spark debate — when in doubt, Annex 2 to the UStG decides.

New in 2026: 7 % in Hospitality

One important change concerns restaurants and cafés: since 1 January 2026, food in hospitality is permanently taxed at the reduced rate of 7 % — whether eaten in, taken away, or delivered. This is set out in the new § 12 (2) no. 15 UStG (Tax Amendment Act 2025). Drinks expressly stay at 19 %.

For context: during the Covid relief, food was already taxed at 7 % once before. That exception expired at the end of 2023, so restaurant food was taxed at 19 % again from 1 January 2024. Since 2026 the 7 % is back — and this time without a time limit. For restaurateurs, bakeries, and caterers, this means noticeable relief on the VAT on their food business.

Calculating VAT: net, gross, and extracting it

Calculating VAT is pure percentage maths. You only need to know which direction you are calculating.

From net to gross (you know the price without tax):

• gross = net × 1.19 (at 19 %) or net × 1.07 (at 7 %)
• Example: €100 net × 1.19 = €119 gross

From gross to net (you know the final price):

• net = gross ÷ 1.19 (at 19 %) or gross ÷ 1.07 (at 7 %)
• Example: €119 gross ÷ 1.19 = €100 net

Extracting the VAT (you only want the tax portion):

• VAT contained = gross × 19/119 (at 19 %) or gross × 7/107 (at 7 %)
• Example: €119 gross × 19/119 = €19 VAT

The most common mistake hides in the last step: €100 gross does not contain €19 of VAT, but only €15.97 (100 × 19/119). The 19 % always refers to the net amount, not the gross amount. This table shows it:

Expert opinion

A lot of entrepreneurs multiply the gross amount by 0.81 to work out the net — but that's not correct. The right way is to divide by 1.19 to get the net.

VAT on Invoices and Receipts

On a proper invoice, VAT must always be shown openly: the net amount, the rate applied (7 % or 19 %), the tax amount in euros, and the gross amount. Only then can your business customer deduct the stated tax as input VAT.

There is a relief for small-value invoices up to €250 gross (§ 33 UStDV) — the typical till receipt: here it is enough to state the total amount and the tax rate; the tax amount need not be calculated separately. If you issue invoices as a small business, you show no VAT at all and instead note the reference to § 19 UStG.

Book VAT Automatically with Norman

The theory is simple — but in practice the right rate quickly becomes fiddly: 19 or 7 %, net or gross, and at month-end everything has to go into the preliminary VAT return. Norman does this for you:

• The right rate automatically: Norman detects on every invoice and receipt whether 19 % or 7 % applies.
• Net, gross, tax: amounts are split and booked correctly — no manual maths.
• Straight into your books: every entry flows automatically into your EÜR and preliminary VAT return.
• Invoices with the correct rate: issue invoices with the right VAT rate — free and unlimited.

Frequently Asked Questions

How do you calculate 19 % VAT?

You multiply the net amount by 0.19 to get the tax amount, or by 1.19 to get the gross amount directly. Example: €100 net × 1.19 = €119 gross, of which €19 is VAT.

How do you extract the VAT from the gross amount?

At 19 %, you multiply the gross amount by 19/119 (≈ 0.1597); at 7 %, by 7/107. Example: €119 gross × 19/119 = €19 VAT. You get the net amount by dividing the gross by 1.19.

Is the gross price with or without VAT?

The gross price is the final price including VAT — that is, what the customer pays. The net price is the amount without VAT. In business with consumers, gross prices are always shown.

When does 7 % apply instead of 19 % VAT?

The reduced rate of 7 % applies to certain everyday and cultural goods — such as basic foods, books, newspapers, local transport, and, since 2026, food in restaurants too. The list in § 12 (2) UStG and Annex 2 is decisive. Anything not listed there carries 19 %.

Why does €100 not contain €19 of VAT?

Because the 19 % refers to the net amount, not the gross amount. €100 gross contains €84.03 net and €15.97 VAT (100 × 19/119). If you subtracted €19, you would wrongly have calculated from the gross instead of the net.

What is the difference between Mehrwertsteuer and Umsatzsteuer?

None — it is the same tax. "Umsatzsteuer" is the official term from the law, "Mehrwertsteuer" the colloquial word. On invoices, both abbreviations ("USt." and "MwSt.") are permitted.

Conclusion

VAT is — despite its two names — a single tax with two rates: 19 % as standard, 7 % for selected goods such as food, books, and, since 2026, restaurant meals. The maths is simple once you know the direction: ×1.19 from net to gross, ÷1.19 back, and ×19/119 to pull out the tax contained. All that matters is hitting the right rate and cleanly distinguishing net from gross. Read on: VAT for businesses · preliminary VAT return · the small-business rule