Value added tax (VAT), Mehrwertsteuern or Umsatzsteuern in German, is one of the most important sources of government revenue in many countries. According to the Federal Tax Administration of Switzerland, "VAT is based on the concept that those who consume something make a financial contribution to the state.” In Switzerland, it is even the most important source of income for the Confederation, accounting for one third of total revenues. Now, as part of the Covid-19 stimulus package, some countries have decided to temporarily reduce VAT in order to ease the financial burden on consumers. What does this mean for a company? What do I have to do as a Yokoy customer?
Which countries are reducing VAT due to Corona? And what does the reduction in VAT mean for me as a company?
Various countries including Germany and Austria have decided to significantly reduce VAT rates for all sectors or sub-sectors due to the corona crisis. These measures are intended to give the economy a positive boost and strengthen purchasing power. In Germany the VAT rate is to be reduced from 19 to 16 percent - the reduced VAT rate from seven to five percent. In Austria, the reductions mainly affect the catering and cultural sectors, where a reduced VAT rate of 5% is to be introduced.
Despite the good intentions, different voices have already been raised to highlight the high administrative burden associated with a temporary VAT adjustment.
As a Yokoy customer, what do I have to do to implement those adjustments?
As a Yokoy customer you can easily add the new rates under "Admin"/"VAT rates". If you have connected Yokoy directly to your financial system, please make sure that you have set up the additional/new VAT rates in your financial system as well. The AI model of Yokoy adapts automatically and will now also read the new sentences.