Make some margins between borders and image for Rectangle in Excel Application

1) Please run the following code in the Excel Application.

    Sub Macro1()
    
    'Delete all shapes if exists
    For i = ActiveSheet.Shapes.Count To 1 Step -1
        ActiveSheet.Shapes(i).Delete
    Next i
    
    'Add a Rectangle
    With ActiveSheet.Shapes.AddShape(Type:=msoShapeRectangle, Left:=20, Top:=20, Width:=200, Height:=120)
        .Name = "myRectangle"
    End With
    
    'Make some formatting to the myRectangle
    With ActiveSheet.Shapes("myRectangle")
       .Line.Visible = msoTrue
       .Line.ForeColor.RGB = vbBlue
       .Line.Weight = 5
       .Fill.UserPicture "https://upload.wikimedia.org/wikipedia/en/b/ba/Flag_of_Germany.svg"
    End With
    
    End Sub

2) Please check if you got the following Rectangle in your Excel Sheet.

3) I am looking for a macro which gives me the following picture.

As you can understand that I want to make some margins between borders and flag.

Pls try .PictureFormat.Crop to get your expected output.

Microsoft documentation:

PictureFormat.Crop property (Word)

Sub Macro1()
    Dim i
    'Delete all shapes if exists
    For i = ActiveSheet.Shapes.Count To 1 Step -1
        ActiveSheet.Shapes(i).Delete
    Next i
    
    'Add a Rectangle
    With ActiveSheet.Shapes.AddShape(Type:=msoShapeRectangle, Left:=20, Top:=20, Width:=200, Height:=120)
        .Name = "myRectangle"
    End With
    
    'Make some formatting to the myRectangle
    With ActiveSheet.Shapes("myRectangle")
        .Line.Visible = msoTrue
        .Line.ForeColor.RGB = vbBlue
        .Line.Weight = 5
        .Fill.UserPicture "https://upload.wikimedia.org/wikipedia/en/b/ba/Flag_of_Germany.svg"
        
        With .PictureFormat.Crop
            Dim iW: iW = .PictureWidth
            Dim iH: iH = .PictureHeight
            Const OFFSET_PCT = 0.05  ' Modify as needed
            .PictureWidth = iW * (1 - 2 * OFFSET_PCT)
            .PictureHeight = iH * (1 - 2 * OFFSET_PCT * iW / iH)
        End With
    End With
    
End Sub