Vat cut extended: bahncards 50 and 25 cheaper

After rail tickets, discount cards will now also be 10 percent cheaper. The value-added tax is to fall following an agreement between the tax authorities.

Rail travel will become cheaper – because the value-added tax will fall Photo: Michael Probst/ap

Consumers will have to pay 10 percent less for a Bahncard 50 or a Bahncard 25 in the future. The reduction in value-added tax agreed in the German government’s climate package is also to apply to these discount cards from Deutsche Bahn. According to dpa information, the highest tax authorities of the federal states have agreed to this. A letter to this effect from the Federal Ministry of Finance has been made available to the Deusche Presse-Agentur. The ministry confirmed the news to the taz. The lower price applies to all railcards valid from February 1.

Those who order their Bahncard from February in the coming days of January should already benefit from the lower prices, according to dpa information. Those who have only recently ordered at the old VAT rate are to receive a voucher for the difference. These customers are to be contacted by Deutsche Bahn.

In the climate package at the end of December, the German government decided to reduce the VAT rate from 19 to 7 percent for long-distance rail services. The reduced ticket prices have been in effect at Deutsche Bahn since the beginning of January. The Bahncard 100 is also included.

It was not yet clear whether the other two Bahncard types – with which customers pay half and a quarter less respectively for tickets – would also become cheaper. The federal and state governments had been negotiating this, and now a decision has been made. In Germany, more than 5 million people own a Bahncard.

Good for the climate

"We are delighted with the rapid agreement between the federal and state governments," Passenger Transport Board member Berthold Huber announced on Friday. "Right at the start of the year, this is another step toward a climate-friendly mobility turnaround."

With the VAT cut, the German government wants to encourage more people to switch from cars or planes to the more climate-friendly railroads. Deutsche Bahn had repeatedly stressed in recent weeks that it would also welcome such a reduction for all Bahncard types.

However, the measure only affects long-distance traffic, 99 percent of which is controlled by Deutsche Bahn. In regional transport, on the other hand, prices rose by an average of 1.7 percent at the timetable change.

The 12 percentage point reduction in VAT means a price reduction of 10 percent. Example calculation: A 100-euro ticket costs 119 euros with 19 percent VAT. With 7 percent tax, it is 107 euros. Difference: 12 euros. That’s almost those 10 percent of 119 euros.