Two rates of sales tax

The German Mehrwertsteuer (MwSt) is what the British call Value Added Tax (VAT). The Australians I think call it a Goods and Services Tax (GST) and in the States we just call it a plain old Sales Tax.

In Germany this tax comes in two flavors: 19 % for most things and a reduced rate of 7 % for things that are deemed to be necessities or particularly worthy of support, like food, books, newspapers, magazines, flowers, dog food and tickets for public transport up to 50 km. Lobbyists for various industries are constantly at work in the Bundestag (parliament) trying to convince elected representatives that their particular product should be taxed at the reduced rate.

This poster in Berlin-Charlottenburg is protesting the fact that chairlifts in ski resorts are taxed at the reduced rate of 7 %, whereas children’s car seats and playground equipment are taxed at the full rate of 19 %. Perhaps the German government wants people to go skiing but not have children?

My photo in this post is from 2009. I revised the text in 2019.

See more posts on Berlin, Germany.

7 thoughts on “Two rates of sales tax”

  1. India introduced & implemented GST – goods & service tax in July last 2017. It has 4 slabs : 28% 18% 12% 5%

    Luxury items are taxed higher & essential items fall into lower bracket. Tax on white goods ranges between 12-18. Gradually govt is moving daily essential items into lower bracket and some are taxed nil. This system is more transparent. Many tax evaders have revolted against this system as they no longer get a chance fudge their account books.

    Bicycles are taxed at 12%. Manufacturers , retailers & environment activist have demanded to reduce the slab & decision is pending.

  2. We have the HST (Harmonized Sales Tax) in most provinces in Canada. It is 13% in Ontario where we live. Plus we have income tax, land tax and if you are in business you are literally taxed to death. You get a much better deal if you are a multinational. Recently, as of April 1st, we have a “carbon tax” and if you aren’t “gun ho” for it you don’t believe in global warming. I think most of the money from our taxes goes into general revenues that accomplishes little more than paying fines to multinationals for some violation of their rights according to Chapter 11 of some trade agreement. They seem to think the tax payer is a bottomless pit.

  3. In France we have TVA value added tax of 19,6% but many necessary items are only 5,5% like velux windows in your house… Now they are talking of another tier of taxes as 19,6% is too much lol! We will see what Macron have to say tonite on TV!

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