VAT and customs duties must be carefully planned these days because mistakes can have an irreparable effect on your bottom line. Skilful VAT planning also offers many opportunities to streamline processes and thereby optimise costs.
In Germany, VAT provides the greatest share of the national budget’s tax income. Around the world, countries are increasingly focusing on securing their tax revenue streams. As a result, tax offices are now scrutinising VAT more closely when conducting a general audit or special VAT audit. Companies need to take note, not only because of the risk of back payments on the VAT but also because the fines can be levied not only on the company itself but also on individual employees of that company if it is determined that errors were committed. In Germany, moreover, the particularly harsh criminal tax law poses a threat that should not be downplayed.
EU Commission activities and European Court of Justice case law now exert a greater influence than ever on national legislation and the case law of the financial courts and the Federal Finance Court. Despite the EU-wide harmonisation of VAT law by the EC Directive on the System of VAT, (unforeseen) deviations between Member States occur time and time again.
In day-to-day operations, it is therefore becoming increasingly difficult to assess the correct VAT for every transaction. This is especially true abroad, but even in purely German business dealings, it remains a challenge to stay abreast of the latest requirements and maintain a good overview of all the factors involved. Reflecting this complexity in the individual IT solutions has become a Sisyphean task.
We provide you with the support needed to master all these challenges.
Typical risk areas for companies:
- VAT groups, in particular, the monitoring of the respective requirements (e.g., internal policies, personnel changes in corporate management)
- Impact of the EU Action Plan, e.g., Quick Fixes 2020, E-Commerce Package 2021, Final VAT System 2022
- Warehouse concepts (in particular for consignment stock) and the associated VAT/customs issues
- Chain transactions, e.g., allocation of the goods movement and application of the triangulation transaction regulations
- Import of goods (e.g., tariff codes, import VAT deductions)
- Qualification as a VAT taxable person, particularly in holding structures
- Mergers & acquisitions involving a potential sale of a going concern
- Cost recharges between affiliated companies
- Input VAT deduction (e.g., VAT groups, investment, valid VAT invoices, pro rata input VAT)
- Distribution networks and their impact on the VAT, e.g., procurement and sale, commission and agency business, and the relationship between headquarters and the permanent establishments
- Changes to intercompany transfer prices, such as year-end adjustments and their impact on VAT and customs
- Industries with a number of special challenges, such as healthcare/pharmaceuticals, foreign event organisers, travel service providers, banks, insurance companies, real estate, and automotive
VAT legislation is changing more rapidly than any other area of tax law due to the influence of the European Court of Justice and the EU Commission. At the national level, one can always count on surprises from the financial courts, the fiscal administration and, last but not least, the legislators. Our team of specialists continuously monitors the situation and can promptly inform you of any new opportunities or risks. We also keep you informed about important VAT-related news from case law and administration via our website.
Multinational enterprises with customers and suppliers around the globe appreciate the amount of time and staff it takes to fulfil the many different tax obligations. The assistance of our global network of specialists enables us to handle any issues related to VAT, foreign trade law, and customs in a coordinated manner. Our Global VAT & Indirect Tax Group has contacts in all major economic centres.
Establishing your company, expanding its business model, or handling a restructuring each poses different challenges with regard to VAT and customs and therefore requires different advisory services. Our experts understand the VAT opportunities and risks for each situation and continuously monitor the VAT landscape.
Whether you simply need a sparring partner with whom you can discuss a particular VAT problem, or you need a comprehensive memo that also addresses other related legal areas: our team of specialised VAT advisers, lawyers, and auditors – is ready to assist you in any situation with comprehensive expertise, regardless of your needs.
Complex cases such as mergers & acquisitions, insolvency cases, or criminal investigations must be examined from every angle. Even if the primary issue is more VAT-related: together with our internal and external experts, we stand ready to cover all legal aspects as they relate to VAT.
Especially if your situation involves a large enterprise with numerous foreign entities, the need for efficient coordination is great. We help you keep track of everything using the digital tools we have developed.
Our services (a selection):
- Comprehensive consulting on all VAT and customs matters - in your preferred format: as a quick phone call, a brief statement via email, or a detailed memo.
- VAT Compliance Inspection: We put your business activities under the VAT-microscope before the first VAT return is filed. This provides a high degree of assurance that mistakes which repeat themselves every month do not creep in. If VAT returns have been filed for some time, a VAT Compliance Inspection can make sense as well. Click here for more information.
- Advice for advisors: We support other tax advisors with special VAT issues – as a sparring partner over the phone, by checking your documents or by writing a complete VAT memo. Learn more about this service here.
- VAT registration and EORI number: In Germany and, in cooperation with the Global VAT & Indirect Tax Group, also worldwide.
- VAT Compliance and Outsourcing: Preliminary and annual VAT returns, OSS reports, EC sales lists, Intrastat declarations, and input VAT refund applications. Our VAT Compliance Inspection - in which we examine your business with regard to VAT - ensures that we meet the highest standards for quality.
- Customs Compliance: We help you implement export control and sanctions list verification and, if desired, create a holistic monitoring plan for the continuous monitoring of your streamlined handling of customs compliance.
- AEO: You have various options available here, and we work together with you to determine which one is right for you and then guide you through the application process.
- VAT Group Cross-Check: As long as the VAT group that everyone desires does not yet exist, it is important to carefully monitor the situation to either determine whether the conditions for it have been met or to take specific steps to avoid this. We assist you in this matter.
- Business Optimisation: We analyse your business model and work with you to develop ways to optimise your VAT situation – of course, aligned with your business policy goals and opportunities.
- Digital VAT Scan: Your company's VAT-related data is extracted and then analysed using the IDEA analysis software.
- VAT and Customs Health Check: Together with you, we identify your company’s key business transactions, determine the correct VAT and customs treatment, and conduct spot checks of the accounting, tax returns, and invoicing. This gives you insights into how well your company is handling the VAT issue.
- Audits, special VAT audits, and customs audits: We are the first point of contact for the auditor and prepare defence arguments wherever possible.
- Appeals and court proceedings: If no agreement can be reached with the tax office, we evaluate the chances of a successful appeal or a lawsuit for you in advance and prepare powerful legal cases to be argued before the tax courts, the Federal Finance Court, and the European Court of Justice.
- Contract reviews and consulting on contractual format: Through clever advance planning and choice of the best VAT clause, we can help you avoid VAT blunders.
- Due diligence in mergers & acquisitions: We evaluate the associated VAT risks and, if necessary, propose alternative formats.
- Implementation of your specific VAT requirements in your systems environment: together with our IT experts, we assist you in determining the appropriate tax codes or migrating to a new release of SAP S/4 HANA, for example.
- BREXIT: We work with you to meet the challenges of new supply chains and changing customs requirements.
- Staff Training: On request, we provide seminars individually tailored to your company’s functional areas (procurement, sales, and accounting) and/or to your specific business operations – national and international.
- (Electronic) VAT manuals: specially designed for use at the sales or distribution level to help staff make the right decisions when preparing a contract.
- Corrected tax declarations as specified in § 153 AO or voluntary self-disclosure as specified in § 371 AO: The decision is no longer easy these days. We work closely with you to determine the best approach.
- Criminal Investigations: These investigations pose a serious threat to those affected. We collaborate with well-known tax law experts and work together to develop the best defence strategy.
- Advisory services for consultants: As a small or medium-sized tax consulting office, it is nowadays impossible to maintain detailed expertise in all areas of specialisation. We assist you with complex VAT issues – if you wish, discreetly in the background and with full client protection.
Our tools and solutions
- VAT-ID Checker Tool to verify the VAT-ID: Quick, easy, and always available online via our self-service portal or seamlessly automated through ERP integration, our fully integrated software solution lets you verify the validity of foreign VAT-ID numbers. You have many options, and we help you find the best ones for your needs.
- Signals/InControl: Communicating with us is simple and straightforward: Our VAT & Indirect Tax team uses a number of globally accessible tools, including our communication platform Signals and the InControl dashboard. Especially if your company is active internationally, it’s very helpful to be able to see at a glance what has been accomplished and where you need to take action.
- Development of Customised IT tools: Quickly and correctly implementing the IT measures necessary in response to new VAT obligations is challenging and, above all, very different for each company. If you help us understand your company from the ground up, we will work with you to develop an IT solution that fits your specific needs – as a team with our internal IT experts.
- Coming soon: VAT comparison tool for VAT: Know in advance what you can expect overseas: our VAT comparison tool helps you can learn about the VAT laws of other countries and gives you an overview of your company's VAT rights and obligations abroad. This provides a solid foundation for making informed decisions, especially in the case of restructuring and expansion.
We have seen four clear trends in the past few years: VAT is becoming not only more international, but also more process-oriented and with a greater focus on the legal framework – completely different aspects of the same thing. Industry-specific demands are also becoming increasingly important. A "one size fits all" approach thus no longer produces the desired result, even in (what appears to be at first sight) a limited area of tax law such as VAT.
We therefore rely on multidisciplinary expertise and diversity in our team. Lawyers, tax advisers, economists, customs experts, IT staff, and compliance specialists work hand in hand to cover every facet of VAT –experienced staff of all ages, genders, and nationalities.
Many of our experts also specialise in specific industries. Our colleagues therefore understand what you are saying, for example, if you are a pharmaceutical company discussing manufacturer discounts, or an insurance company dealing with extended payment surcharges, or when you are active in the automotive sector "connected car".
Through our contacts in the Global VAT and Indirect Tax Group, we can locate an experienced contact person in (almost) every country – from Bahrain to China to South Africa.
Our experts for VAT and indirect taxes regularly contribute articles to specialist publications and serve as conference speakers – at home and abroad, internally and externally. In addition, we produce our own specialist publications.