Latest VAT News
Here, we regularly inform you about new court decisions and other newsworthy developments in VAT matters.
Hobby as an economic activity
12 January 2026
In its ruling of 9 July 2025, published unofficially on 18 December 2025 (XI R 32/22), the federal fiscal court ruled on a case concerning the status as a VAT taxable person in connection with the renovation of a castle.
VAT rate reduction for the gastronomy industry
8 January 2026
On 19 December 2025, the Federal Council in Germany approved the Tax Amendment Act 2025. This means that from 1 January 2026, restaurant and catering services (with the exception of the sale of beverages) will be permanently subject to the reduced VAT rate of 7%. Beverages will remain subject to the standard tax rate of 19% (section 12 (2) No. 15 UStG, new version).
Factoring with collection as partial loan
12 December 2025
On 23 October 2025, the ECJ ruled on the Finnish case A Oy (C-232/24), which concerned various types of factoring with collection of the claim. The question to be clarified was whether the service consisted entirely of the taxable collection of claims, or whether it included a VAT-exempt loan.
Educational services: BMF circular dated 24 October 2025
12 December 2025
On 1 January 2025, § 4 No. 21 of the German Value Added Tax Act (UStG) on educational services was amended. The legislator responded to infringement proceedings, according to which the previous German regulations did not comply with EU law. It was clear from the outset that this new version would require interpretation by the tax authorities. On 24 October 2025, the circular from the Federal Ministry of Finance was finally published.
BMF circular on e-invoicing
28 November 2025
Exactly one year after its circular dated 15 October 2024, the BMF (Federal Ministry of Finance) has published another circular on e-invoicing. It incorporates the new legal regulations that have been in force since 1 January 2025 into the German VAT Implementation Regulations, supplements the previous version on a number of points and focuses on technical validation.
VAT exemption for an unauthorised private hospital
27 November 2025
In its ruling of 8 July 2025, published on 27 November 2025 under file no. XI R 36/23, the Federal Fiscal Court in Germany (BFH) ruled on the possible VAT exemption of services provided by a private hospital that was not licensed under § 108 of the German Social Code, Book V (SGB V).
Credit intermediary services in the absence of authority to conclude contracts
26 November 2025
On 26 November 2025 (T-657/24), the European Court (EC) ruled on a Portuguese request for a preliminary ruling on the concept of intermediary services in credit intermediation.
Scientific and educational events
24 November 2025
On 24 October 2025, the Federal Ministry of Finance (BMF) published an information sheet intended to inform businesses about the criteria for VAT exemption for lectures, courses and other scientific or educational events in accordance with § 4 No. 22 letter a of the German VAT Act (UStG).
ECJ rules on the Arcomet case concerning transfer pricing adjustments
6 October 2025
In the Arcomet Towercranes case (C-726/23), the ECJ ruled on 4 September 2025 that a transfer pricing adjustment can constitute a retrospective increase of the taxable amount. However, the decision cannot be generalised.