Latest VAT News
Here, we regularly inform you about new court decisions and other newsworthy developments in VAT matters.
Distance sales and B2C supplies of services - changes in the law as from 1 July 2021
If your company operates cross-border in the B2C (business to consumer) sector, there is a high probability that VAT reporting obligations will arise in other EU Member States as of 1 July 2021 due to the implementation of the eCommerce Directive. Are you affected?
Taxable exchange of supplies between the headquarters and a permanent establishment - ECJ-ruling "Danske Bank" (C-812/19)
In its ruling in the "Skandia America" case, the ECJ (European Court of Justice) had already postulated that a taxable exchange of supplies between the headquarters and a permanent establishment was possible in VAT group cases - which contradicts the German understanding of this matter. The ECJ reaffirmed this view in the "Danske Bank" case (C-812/19)
Appropriate key for input VAT apportionment of mixed-use buildings - BFH ruling XI R 7/20
The BFH (Germany’s Federal Court of Finance) gives priority to the object-related turnover key when determining the input tax apportionment for mixed-use buildings (ruling dated 11 November 2020, XI R 7/20).
Provision of company cars for private use - ECJ-ruling "QM" (C-288/19)
In its judgement in the "QM"-case dated 20 January 2021 (C-288/19), the ECJ has rejected the previous VAT taxation of the provision of cars to employees for personal use, insofar as the employee does not have to pay for the personal use. This opens up new options in cross-border cases.
Taxation of travel services according to Sec. 25 German VAT Code - BMF circular letter dated 29 March 2021
According to a circular letter from Germany’s Federal Ministry of Finance (BMF), dated 29 March 2021, the special provision of Section 25 of the German VAT Code will no longer apply to travel services provided by companies having their registered office in a third country and without a permanent establishment in the EU as of 1 January 2022. This decision is surprising because it has no basis in the wording of Section 25 of the German VAT Code.
Partnerships as integrated companies - ECJ-ruling "M-GmbH" (C-868/19)
The fact that partnerships generally qualify as integrated companies of a VAT group under Section 2 (2) No. 2 of the German VAT Code is no longer in dispute since the ECJ (European Court of Justice) ruling in the Larentia + Minerva and Marenave cases. However, the two VAT senates of the BFH (Germany’s Federal Court of Finance) have so far disagreed on whether this applies unconditionally. This dispute has now been decided by the ECJ in the"M-GmbH"-case (C-931/19)