Here, we regularly inform you about new court decisions and other newsworthy developments in VAT matters.
Symbolic remuneration is insufficient for economic activity - BFH ruling XI R 35/19
Free of charge supplies are a problem for VAT purposes: If there is no case of taxable gratuitous transfer of value, the gratuitousness leads to the fact that there is no right to deduct input VAT for supplies purchased for this purpose. In practice, this situation is often avoided by agreeing on at least a small, possibly only symbolic remuneration – if the requirements of the minimum assessment basis are not met. The ECJ decision in the "Gemeente Borsele" case has severely restricted this alternative. The XIth Senate of the BFH (Federal Fiscal Court) is now also dealing with this.
Input VAT apportionment for mixed-use real estate – BMF circular letter dated 20 October 2022
The permissible pro-rata key for input VAT on real estate that is only partially used for transactions entitled to input VAT deduction (mixed-use real estate) has been the subject of dispute for a long time. The tax authorities want to, as much as possible, replace the total turnover key (required by the VAT Directive, by default) with an area key. However, they are encountering an obstacle: the deviating case law of the ECJ and BFH (Federal Fiscal Court).
VAT Committee publishes working paper on fuel cards
With its ruling in the "Vega International" case (C-235/18, 15 May 2019), the ECJ had shaken the fuel card business to its foundations: from a VAT perspective, fuel card issuers should no longer be seen as buying and selling fuel, but rather as providing financial services. This initially prompted the German Federal Ministry of Finance (BMF) to circulate a draft letter indicating that the chain supply business would be declared the exception rather than the rule starting 1 January 2022. When it became known that the EU’s VAT Committee wanted to deal with the issue, the authority backed off to await the outcome in the interest of having a uniform EU-level ruling. On 21 October 2022, the VAT Committee published a working paper on this issue (No. 1046).
Financial authorities ease use of equitable measures due to Ukraine war - BMF circular letter dated 5 October 2022
The BMF has taken into account the fact that companies are currently under pressure, in particular as a result of rising energy costs resulting from the Ukraine war, and that these difficulties could also make it more difficult for them to pay their taxes. In its letter of 5 October 2022, the Federal Ministry of Finance (BMF) therefore instructs the tax authorities to "responsibly exploit" the discretionary scope for equitable measures.
Everything as usual with company car taxation? - BFH ruling V R 25/21 of 30 June 2022
Upon referral by the Saarland Fiscal Court, the ECJ (ruling of 20 January 2021, C-288/19) had (apparently?) rejected the VAT taxation scheme in case the employee does not have to pay for the private use. The tax court then ruled accordingly. In the appeal proceedings, however, the BFH (Federal Court of Finance) came to the conclusion in its ruling published on 29 September 2022: The legal conclusions drawn by the tax court cannot be inferred from the ECJ ruling because this was not even asked for.
Government Draft JStG (Annual Tax Act ) 2022: Zero VATrate on solar modules for photovoltaic systems
On 14 September 2022, Germany’s Federal Government submitted a draft Annual Tax Act (JStG 2022), which contains a significant addition to the speaker's draft law dated 28 July 2022: a zero VAT rate will be applied to solar modules for photovoltaic systems starting
1 January 2023.
Update: Direct claim ("Reemtsma claim") in case of wrongly paid VAT: Financial Court Münster refers case to ECJ (C-453/22-1)
If the recipient of the supply cannot recover the excess VAT from the supplier, a direct claim (or "Reemtsma claim") against the tax office may be considered under certain conditions.
Update: Direct claim ("Reemtsma claim") in case of wrongly paid VAT: Financial Court Münster refers case to ECJ (C-453/22-1)
If the recipient of the supply cannot recover the excess VAT from the supplier, a direct claim (or "Reemtsma claim") against the tax office may be considered under certain conditions.
BFH decision XI S 4/21 involves the requirements for a single-purpose voucher in the case of chain transactions
With retroactive effect to 1 January 2019, the German legislature has transposed the EU Voucher Directive into national law. In section 3.17 of the VAT application decree, the German tax authorities provide a detailed statement. However, questions still remain. The BFH (Federal Financial Court) has now granted a suspension of execution with regard to a chain transaction with (alleged?) single-purpose vouchers.
10 June | 16:00 – 18:00 CET
The e-commerce sector has been growing rapidly in the last few years, entirely changing the way business is transacted. This growth comes with new rules and regulations, including the new VAT rules for online cross-border sales of goods and services. Set to come into effect on 1 July 2021, these new rules have the purpose of strengthening the European internal market and...
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