Latest VAT News
Here, we regularly inform you about new court decisions and other newsworthy developments in VAT matters.
Cost pass-on – BMF letter dated 20 June 2023
If an entrepreneur passes on costs, there is always the question as to whether this is a remuneration for supply that is subject to VAT. The BFH (German Federal Fiscal Court) took a position on this question last year in connection with market fees for agricultural producer groups and with advance costs for slaughterhouses. The BMF (German Federal Ministry of Finance) has now adopted these positions by including them in the administrative guidelines to the German VAT Code (UStAE).
Isolated accommodation service can be a “TOMS” travel service - ECJ judgement C-108/22
In the "Alpenchalets Resorts" case (C-552/17), the ECJ had already ruled for holiday flats that a TOMS travel service does not have to consist of several components in order to be subject to margin taxation. The ECJ has now confirmed this for hotels in a Polish case.
No fixed establishment by subcontractors - ECJ judgement "Cabot Plastics Belgium SA" (C-232/22)
Having a fixed establishment requires having human and technical resources in the country concerned - the ECJ made this particularly clear in its Titanium ruling. Whether, and under what conditions, third-party resources can be considered as fulfilling this requirement has not been fully clarified. However, the ECJ has now added another piece to the puzzle by addressing the question of whether a closely associated subcontractor can be considered a fixed establishment of the principal.
BMF-Schreiben zu Anwendungsfragen bei dezentraler Besteuerung von Organisationseinheiten der Gebietskörperschaften Bund und Länder
Das Bundesministerium der Finanzen hat kürzlich ein neues Schreiben herausgegeben, in dem Regelungen zur dezentralen Umsatzbesteuerung von Organisationseinheiten der Gebietskörperschaften Bund bzw. Länder gemäß § 18 Abs. 4f UStG und Sondervorschriften für eine von den Vorschriften der AO abweichende Festlegung der örtlichen Zuständigkeit für die Besteuerung dieser Organisationseinheiten gemäß § 18 Abs. 4g UStG behandelt werden.
Charging stations for electric vehicles - ECJ judgement "P. w W." (C-282/22)
How supplies related to charging stations for electric vehicles should be treated has long been a matter of dispute. Although the VAT Committee has long favoured treating it as a supply of goods, this is not binding on the EU Member States. Now the ECJ has issued a ruling confirming this view.
§ 15a input VAT adjustment in the case of assets that have become unusable - ECJ ruling (C-127/22) of 4 May 2023
If an entrepreneur claims an input VAT deduction for an object but then uses that object differently than intended, it may be necessary to adjust the input VAT. In a Bulgarian case, the ECJ dealt with the question of whether the disposal, destruction, or sale of assets that have become unusable requires that such an adjustment be made.
Only one VAT rate for a uniform supply - ECJ judgement "Finanzamt X" (C-516/21)
VAT law includes a splitting requirement for certain combinations of supplies. Thus, the leasing of permanently installed equipment and machinery does not enjoy the same VAT-exempt status as the leasing of the property even if the equipment/machinery is an essential component of the property. Upon referral by the BFH, the ECJ addressed the question of whether different VAT rates must be applied even if these constitute an ancillary supply to the principal supply of letting a building.
BMF presents draft for the changeover to mandatory e-invoicing as of 2025
After the EU Commission presented a draft for an amended VAT Directive on 8 December 2022 within the framework of the project "VAT in the Digital Age" (ViDA), which is intended to digitalise the invoicing and reporting obligations, the BMF is following suit. A draft for discussion on the new e-invoicing has been presented to the various stakeholders.
Chain transactions - BMF letter dated 25 April 2023
§ 14c- VAT in the case of negative VAT statement / Use of supplementary information - BMF circular letter dated 18 April 2023
Because every invoice showing VAT bears the risk of input VAT deduction, VAT is owed solely because of the statement in the invoice. However, there are always situations in which the design of the invoice or the overall circumstances could lead someone to the conclusion that the recipient might believe that he/she is entitled to deduct input VAT. After the Federal Fiscal Court (Bundesfinanzhof, BFH) ruled on a case concerning the statement of negative VAT amounts and the inclusion of supplementary documents, the Federal Ministry of Finance (Bundesministerium der Finanzen, BMF) implemented this ruling in the administrative guidelines to the German VAT Code (UStAE) but modified the BFH's statements.