Latest VAT News
Here, we regularly inform you about new court decisions and other newsworthy developments in VAT matters.
Forschungseinrichtungen – Finanzverwaltung positioniert sich zum Umfang des Unternehmens und des Vorsteuerabzugs
16.02.2023. Bisher war es regelmäßig wesentlicher Diskussionspunkt im Rahmen von Betriebsprüfungen und der Erstellung von Steuerklärungen, inwieweit Forschungseinrichtungen umsatzsteuerliche Unternehmer und damit auch zum Vorsteuerabzug berechtigt sind.
Charging stations for electric vehicles - ECJ judgement "P. w W." (C-282/22)
How supplies related to charging stations for electric vehicles should be treated has long been a matter of dispute. Although the VAT Committee has long favoured treating it as a supply of goods, this is not binding on the EU Member States. Now the ECJ has issued a ruling confirming this view.
§ 15a input VAT adjustment in the case of assets that have become unusable - ECJ ruling (C-127/22) of 4 May 2023
If an entrepreneur claims an input VAT deduction for an object but then uses that object differently than intended, it may be necessary to adjust the input VAT. In a Bulgarian case, the ECJ dealt with the question of whether the disposal, destruction, or sale of assets that have become unusable requires that such an adjustment be made.
Only one VAT rate for a uniform supply - ECJ judgement "Finanzamt X" (C-516/21)
VAT law includes a splitting requirement for certain combinations of supplies. Thus, the leasing of permanently installed equipment and machinery does not enjoy the same VAT-exempt status as the leasing of the property even if the equipment/machinery is an essential component of the property. Upon referral by the BFH, the ECJ addressed the question of whether different VAT rates must be applied even if these constitute an ancillary supply to the principal supply of letting a building.
BMF presents draft for the changeover to mandatory e-invoicing as of 2025
After the EU Commission presented a draft for an amended VAT Directive on 8 December 2022 within the framework of the project "VAT in the Digital Age" (ViDA), which is intended to digitalise the invoicing and reporting obligations, the BMF is following suit. A draft for discussion on the new e-invoicing has been presented to the various stakeholders.
Chain transactions - BMF letter dated 25 April 2023
§ 14c- VAT in the case of negative VAT statement / Use of supplementary information - BMF circular letter dated 18 April 2023
Because every invoice showing VAT bears the risk of input VAT deduction, VAT is owed solely because of the statement in the invoice. However, there are always situations in which the design of the invoice or the overall circumstances could lead someone to the conclusion that the recipient might believe that he/she is entitled to deduct input VAT. After the Federal Fiscal Court (Bundesfinanzhof, BFH) ruled on a case concerning the statement of negative VAT amounts and the inclusion of supplementary documents, the Federal Ministry of Finance (Bundesministerium der Finanzen, BMF) implemented this ruling in the administrative guidelines to the German VAT Code (UStAE) but modified the BFH's statements.
Status as taxable person in loss-making activities – ECJ judgements "Gmina O." and "Gmina L." (C-612/21 and C-616/21)
In the "Gemeente Borsele" case, the ECJ had already ruled that purely symbolic charges with very little cost recovery were not a remuneration, but rather a type of administrative fee. Thus, there is also no right to deduct input VAT.
VAT grouping: BFH refers internal supplies to the ECJ again and changes jurisdiction on voting rights
After the ECJ had ruled on the two ECJ cases "Finanzamt T" and "Norddeutsche Diakonie", experts breathed a sigh of relief because they no longer had to fear that the ECJ might reject the German concept of VAT grouping altogether. However, the ECJ did not confirm the non-taxability of internal supplies as clearly as they had wished. The V. Senate of the BFH (Federal Financial Court in Germany) is therefore referring the "Finanzamt T" case to the ECJ for a second time. The XI. Senate, on the other hand, is publishing its follow-up decision in the "Norddeutsche Diakonie" case and adapting to the ECJ case law.
