Latest VAT News
Here, we regularly inform you about new court decisions and other newsworthy developments in VAT matters.
Annual Tax Act 2026: New rules on VAT groups
3 June 2026
One thing stands out in the draft bill for the Annual Tax Act of 19 May 2026: the long-awaited comprehensive reform of VAT grouping. Does it live up to expectations?
ECJ rules on transfer pricing adjustments
2 June 2026
Where repair costs in the automotive sector are passed through within the distribution chain and transfer prices are adjusted based on those costs, this constitutes a repair service only if a respective legal relationship exists. This was the ruling of the ECJ on 13 May 2026 in the case of Stellantis, C-603/24.
Full interest does not contravene EU law
21 May 2026
The full accrual of interest on arrears under section 233a of the German Fiscal Code (AO) neither serves to implement EU law nor does it otherwise fall within its scope. It also complies with the principles of equivalence and effectiveness. This was decided by the Federal Fiscal Court (BFH) on 11 December 2025 (published on 7 May 2026), V R 7/24.
Reduction of the tax base upon assignment
13 May 2026
Where a claim arising from a supply subject to VAT is assigned, the assignee does not acquire the right to adjust their VAT if the claim becomes irrecoverable. This right remains with the assignor. This was decided by the General Court on 22 April 2026 (T-233/25).
Input VAT deduction from advance payment invoices
8 May 2026
Input VAT deduction from an advance payment invoice does not require the invoice to explicitly refer to the advance payment. However, the recipient of the supply must assume that the invoice relates to a supply yet to be provided, and must expect to receive the supply. This was decided by the BFH on 4 December 2025 (published on 23 April 2026), V R 38/23.
Sale of a business where a tenant continues operations
17 April 2026
If the purchaser of a business does not use it, as the seller did, for their own business activities, but instead leases it out, the tenant cannot be relied upon to demonstrate the intention to continue the business as a prerequisite for the transfer of a totality of assets. This was decided by the Federal Fiscal Court on 13 November 2025 (V R 3/23, published on 19 March 2026).
BFH on the sale of solar power plants
17 April 2026
If the seller continues to operate the business himself without any changes, this does not constitute a transfer of a totality of assets even if ownership of all material parts of the business has been transferred. This was decided by the Federal Fiscal Court (BFH) on 13 November 2025 (published on 19 March 2026, V R 32/24).
Direct and immediate link in terms of input VAT deduction
13 April 2026
The fact that a purchase which serves to provide VAT-exempt healthcare services, but is also, by virtue of a statutory provision, a legal prerequisite for the provision of VAT taxable services, is not in itself sufficient to justify input VAT deduction. This was decided by the ECJ on 19 March 2026 in the Czech case of Oblastní nemocnice Kolín (C-513/24).
BFH: taxation of withdrawals/input VAT correction
10 April 2026
If the sporting activities of a sports club are transferred to a limited liability company (GmbH), there is no transaction which must be treated as made for consideration if the club makes a sports stand and floodlighting available to the GmbH free of charge. However, an input VAT correction must be made (BFH ruling of 6 November 2025, V R 36/23, published on 12 March 2026).
ECJ ruling on the standstill clause in cases of exclusion from input VAT deduction
23 March 2026
Exclusions from input VAT deduction not provided for in the VAT Directive are permissible even if the EU Member State concerned only enacted them upon accession to the EU, provided that there was no VAT system with input VAT deduction prior to accession. This was decided by the ECJ on 12 March 2026 in the case of Randstad España SLU (C-515/24).