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Germany: Tax Rate for Female Sanitary Products Reduced

(Jan. 3, 2020) On January 1, 2020, a new reduced tax rate of 7% for female sanitary products went into effect in Germany. The tax reduction was enacted as part of the Annual Tax Act. (Annual Tax Act art. 12, no. 21.)

Background to the Tax Reduction

The German Value-Added Tax Act (VAT Act) charges either a VAT of 19% for luxury items or a reduced rate of 7% for basic food products and other everyday necessities. (VAT Act § 12.) The VAT Directive of the European Union (EU) allows member states to levy a reduced rate on women’s sanitary protection items. (VAT Directive art. 98 in conjunction with Annex III.) Other EU member states have enacted reduced rates, for example the United Kingdom.

Supporters of a reduced rate on female sanitary products had campaigned for years to no avail. In February 2019, a public petition was submitted to the German Bundestag (parliament) to reduce the tax rate from 19% to 7%, citing (fiscal) discrimination of women. The petition garnered the required 50,000 signatures to be debated in a public hearing of the petition committee of the German Bundestag. In November 2019, the German Bundestag voted in favor of the tax reduction. The German Minister of Finance, Olaf Scholz, stated, “A lot of women have campaigned for this. We will get it off the ground now. … Because it is the right thing to use a reduced tax rate.”

As a promotional measure and to show support for the cause, some retailers had already begun applying the reduced rate for female sanitary products in December 2019.