Focus on VAT 2/2019

The Federal Ministry of Finance (BMF) has published the draft for the 2019 Annual Tax Act. This will include some significant alterations with regard to VAT. While the reduced VAT rate for e-books etc. is very industry-specific, the implementation of the so-called “quick fixes” by the EU will affect almost every company involved in the EU-wide movement of goods. Harmonized European regulations of important practical cases (e.g. use of consignment stocks, allocation of shipments of goods for cross-border chain transactions) are to be welcomed. However, the formal requirements imposed by new record-keeping obligations are enormous. The revaluation of the VAT identification number and the EC sales list as substantive requirements for a VAT exemption is likely to represent a considerable challenge for many companies with regard to their internal processes. Increased grounds for refusal concerning input VAT deduction and tax exemption will require increased attention in the future.