Germany Proposes Decade-Long VAT Hike to Fund Major Investments
The Ministry of Finance has proposed significant changes to the Value Added Tax (VAT) rates, with increases planned over the next decade. The public is invited to discuss these changes, with a deadline of October 23.
The proposed VAT hike will see the rate for a specific category of goods rise to 10% in 2028, 15% in 2029, and 20% from 2030 onwards. This is part of a broader package that includes substantial investments in infrastructure, education, care, research, housing, digitalization, and climate protection. The Finance Ministry also plans structural reforms to simplify Germany, reduce bureaucracy, and strengthen competitiveness.
In related news, Russia is considering amending its Tax Code to introduce a 5% VAT rate for certain imported goods in 2027. This measure targets foreign products entering the Eurasian Economic Union (EAEU) duty-free. If implemented, it is expected to increase the price of these goods in Russia.
The proposed VAT rate increases and the Russian VAT reform are set to impact consumers and businesses in their respective countries. The public is encouraged to participate in the discussion on the German VAT changes before the October 23 deadline.
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