Implementation guide for SnapTrade users to change VAT rates from July 1, 2020
In view of the consequences of the corona pandemic, the federal government has agreed on a temporary reduction in VAT. From July 1st, 2020 to December 31st, 2020, the VAT rate will be reduced from 19% to 16% and for the reduced rate from 7% to 5% (Sections 12 (1), 28 (1) and (2) UStG).
However, the Ministry of Economic Affairs emphasized that it is the decision of the individual company or retailer to pass on the VAT reduction to consumers. The right to free pricing is not abolished! There is no obligation to reduce the offer prices .
However, it is unclear how Amazon will deal with the reduction in VAT. In order to avoid possible (high) price errors and to remain competitive, it is advisable to adjust the necessary price ranges for your repricing accordingly during this period.
What should SnapTrade users consider when changing VAT?
SnapTrade users who work with our price calculation for Amazon and eBay can set new minimum and maximum prices in SnapTrade by changing the VAT rate on the German marketplace (default values) or on the item (e.g. via CSV upload). The calculation of the price ranges is recalculated as a result.
Our pricing function can also be used to quickly process the item.
Do not reduce your offer prices by 3 %! Why? The answer is illustrated by the following calculation example:
Net price + VAT = gross price
19 %: €10 + 19% (€1.90) = €11.90 100% current offer price
16 %: €10 + 16% (€1.60) = €11.60 97.48% of the original price
You should therefore only reduce your asking prices by the difference of 2.52%. Otherwise you may face a loss in times when the German economy is to be strengthened and Germany’s economic power is to be unleashed.
When doing the reverse calculation on January 1st, 2021, also pay attention to the corresponding increase of 2.59% in SnapTrade so that you are sure to reach your original offer price again.