There is a standard rate and a reduced rate for certain goods. Businesses can deduct the VAT they pay on purchases (input tax) from the VAT they charge.
Small businesses below a turnover threshold can opt out under the small business rule. In everyday language you also hear Mehrwertsteuer (MwSt); it is the same tax.
Full guideGerman VAT registration for foreign businessesGeneral information on German tax law, not advice on your individual case.