Germany - Germany - sales tax increase

Just in case you weren't aware, the national sales tax in Germany is going up - to 19% as of January 1st. That's up from the current 16% on all goods and services. For Americans, the continued devaluation of the dollar versus the Euro - combined with the increase in the German VAT is making a country that used to be relatively cheap - a lot more expensive.

Now, I assume you can get the VAT removed at the airport for durable goods being taken out of the country - but for everything else, ouch!

Yes, that's a big nuisance, even more to us Germans who have to cope with higher prices in daily life, not just on holiday.

Yes, that's a big nuisance, even more to us Germans who have to cope with higher prices in daily life, not just on holiday.

I agree that for anyone who lives here, it is indeed a nuisance.

But for travellers, the effect in terms of real dollars should be minor. It's 3% more on any small transactions you make. On large transactions, you can claim back the VAT when you leave the EU. Store-bought food is unaffected since that only has a VAT of 7%. I don't see travel to Germany getting massively more expensive because of the increase.

I assume you mean VAT, right...? I thought Germany had no sales tax, only VAT.... or?

The purpose of the VAT increase is to allow the lowering of employment taxes....to encourage hiring and address the high unemployment. Most European countries probably would benefit from some George W. Bush economics.

Most European countries probably would benefit from some George W. Bush economics.

and navigate the country into bancruptcy?

no thanks....

I assume you mean VAT, right...? I thought Germany had no sales tax, only VAT.... or?

Yes, Germany has VAT = Value Added Tax = Mehrwertsteuer.
To use the expression "Sales Tax" instead of VAT is fine - how would you explain the difference to US people in one short sentence..?
BTW, what do you have in Argentina...?

Most European countries probably would benefit from some George W. Bush economics.

We'd rather keep our high unemployment than take Bush, thanks.

We'd rather keep our high unemployment than take Bush, thanks.

Or as it was said today by a Newyorker in another thread:

That what six years of a texas moron whose only previous real job was as an Executor of the mentally retarded and other poor souls.:mad: :mad:

To use the expression "Sales Tax" instead of VAT is fine - how would you explain the difference to US people in one short sentence..?I think that most FTers understand the nuances, but to the less-traveled "typical" American, the most useful information might be that quoted prices in VAT countries INCLUDE the tax, while US prices DO NOT include the tax (I understand that this is an overly-simple explanation, but you did limit me to one sentence) ;)

In the many small towns near the German and Netherlands border many dutch would drive the couple of kms into Germany to buy food, booze and especially fuel. After the Germany VAT increase the opposite is true, ie the Germans are driving to Netherlands for better prices and better selection.

MisterNice

In the many small towns near the German and Netherlands border many dutch would drive the couple of kms into Germany to buy food, booze and especially fuel. After the Germany VAT increase the opposite is true, ie the Germans are driving to Netherlands for better prices and better selection.

MisterNice

Well, MisterNice, this is simply not true. My German HQ is close to the Dutch border (by the way: in a big town) and I grew up there and we always went to the Netherlands for food and diesel fuel and since two years for canned coke ;-) and the Dutch always came and come over for clothes, household ware and gas. And to be honest - the VAT will not change anything.

A three percent tax increase in a competitive market is no big deal at all and VAT on food did not change at all. The VAT portion on fuel is not a big deal either, there are several other taxes being responsible for the high gas price.

Rest assured: VAT increase does not drive us crazy. It is less than you are used to tip in a supermarket:D

It always depends on what product you want...

Coffee is much cheaper in the Netherlands, regular fuel in Germany, diesel in the Netherlands...

Clothes is a special topic... There are some really good outlet malls in the Netherlands which are open especially on german holidays... And I know a lot of huge (all dimensions) people who prefere to buy their clothes in the Netherlands because it's much easier to get "huge" stuff over there than at "home"...

This is a one big advantage to live in a border region: Allthough it is all the EU there are dramatic tax differences (and most of it is about taxes other than VAT)

Regular fuel is very highly taxed in the NL, highly taxed in Germany.
Coffee is taxed in Germany but not in the NL.

If you go down to Luxembourg:

Fuel is very decently taxed (a discount of about 30% compared to Germany)
Smoke is veeerrry decently taxes (a discount of about 50%)