Temporary VAT reduction by 3% until 31.12.2020

the contractually not covered should be.

A gross fixed price was contractually agreed. I wonder where this is not covered now. If the supplier has lowered the prices at short notice, I don’t have to lower my price either. Besides, all the costs that come with the change of the VAT rate and the pricing in of the risk that the tax office will then decide the case differently with 4 years of hindsight to the audit using a subsequently issued BMF letter from December 2020, lead to the fact that the entrepreneur does not keep an extra 3% margin. I think most people can’t even imagine all the costs due to 6 months of VAT reduction. Adjusting price lists, adapting websites/online shops, destroying ordered brochures again, program changes, cash register changes, training and much more – all within 3 weeks after the resolution or 1 week after the law resolution. And the whole thing once down and then back up after 6? months. Completely crazy. But I agree with you that there will be many legal disputes.

According to our tax advisor, invoices that show VAT must be adjusted accordingly. The same applies from her perspective to advance payments that do not include any service. She of course phrased it differently, namely in a hard-to-digest email that one has to read 10 times. But in short, that is what it means.

A gross fixed price was contractually agreed upon. I wonder where that is not covered now.
If the supplier has lowered the prices at short notice, I do not have to lower my price either.

Furthermore, just all the costs associated with the change of the VAT rate and the pricing in of the risk that the tax office, with four years of knowledge advantage, then decides the case differently with a subsequently issued BMF letter from December 2020 during the audit, mean that the entrepreneur does not keep 3% more margin.
I think most people cannot even imagine all the costs that accumulate due to a 6-month VAT reduction. Adjusting price lists, updating websites/online shops, destroying commissioned brochures, program changes, cash register adjustments, training, and much more, all within 3 weeks after the resolution or 1 week after the law was passed.
And then reversing everything once down and after 6? months back up.
Completely crazy.

However, I agree with you that there will be many legal disputes.

That is why retail will implement it as stated in the article I referred to. You can easily calculate how much discount you have to give to break even after the six months.
As an entrepreneur, I would definitely do it that way, if only to avoid trouble.

Is the civil law component really like that? Is it about the gross price? I openly admit that I have no idea about that. But since even we, as private end consumers not entitled to input tax deduction, have been given net prices at all sampling appointments in recent months, I would feel differently about that. The supplying company itself does not calculate with gross prices either.

According to our tax advisor, invoices that show VAT must be adjusted accordingly. The same applies from her point of view to advance payments that do not include any services.
Of course, she phrased it differently, namely in a hard-to-digest e-mail that you have to read 10 times.
But roughly speaking, that is how it is.

That anyway – but you can add VAT onto net prices (then the reduction is borne by the customer and is profit-neutral for the company) or you can back out VAT from already agreed gross prices (then the company makes an extra profit and the customer ends up paying just as much as they originally thought).
It should be self-explanatory that only 16% may appear in the period from 1.7. to 31.12.

That anyway - but you can either add the VAT on net prices (then the reduction falls on the customer and is profit-neutral for the company) or you can deduct the VAT from already agreed gross prices (then the company makes an additional profit and the customer ultimately pays as much as they originally thought). It should be self-explanatory that only 16% can appear during the period from 1.7. to 31.12.

But that probably won’t work if there is an offer with a net price and stated VAT. They can’t just increase the net price after the order has been placed. Example why this concerns us: Our windows will be installed next week. They will definitely be finished before 01.07. About a month ago we made a partial payment in the amount of X. The invoice for it did not include any specific service. Our consideration now is that if we manage to have the acceptance after 01.07. and thus the service is only performed then, if our consultant is right, 16% must be applied. Since the partial payment was made without service, there is no service provided to them until acceptance. Ergo, the partial invoice and the final invoice must be retrospectively taxed at 16% if the service is provided in July. However, she admitted that they still have to check all of this, as she herself does not yet have all the information.

That probably wouldn't work if there is an offer with a net price and stated VAT. He can't just increase the net price after the order has been placed.

That is exactly the question that and I are discussing. Whether he is allowed to do that or not. And that, in turn, has nothing to do with tax law, but with civil law. Hence the suspicion about the many lawsuits that could arise.

In my administrative law opinion, a company that does not pass on the "saved" sales tax but makes the customer pay a possible increase should get a slap on the wrist for violating § 307 Baugesetzbuch. However, I am not knowledgeable enough in tax law.