Latest VAT News
Here, we regularly inform you about new court decisions and other newsworthy developments in VAT matters.
Decentrally consumed electricity from CHP plants does not constitute a supply and return supply
BFH ruling V R 22/21 of 11 May 2023
In its ruling of 29 November 2022 (XI R 18/21), the XIth Senate of the Federal Fiscal Court (Bundesfinanzhof, BFH) had already decided that the obligation of the grid operator to also pay a surcharge for decentrally consumed electricity in accordance with the Act on the Maintenance, Modernisation and Expansion of Combined Heat and Power Generation (Gesetz für die Erhaltung, Modernisierung und den Ausbau der Kraft-Wärme-Kopplung, KWKG) does not imply a supply and return supply of the electricity. The Vth Senate has now stated that it is in agreement. The contrary view of the tax authorities (section 2.5 paragraph 17 of the UStAE, the VAT Application Decree) can therefore no longer be upheld.
In its ruling of 29 November 2022 (XI R 18/21), the XIth Senate of the Federal Fiscal Court (Bundesfinanzhof, BFH) had already decided that the obligation of the grid operator to also pay a surcharge for decentrally consumed electricity in accordance with the Act on the Maintenance, Modernisation and Expansion of Combined Heat and Power Generation (Gesetz für die Erhaltung, Modernisierung und den Ausbau der Kraft-Wärme-Kopplung, KWKG) does not imply a supply and return supply of the electricity. The Vth Senate has now stated that it is in agreement. The contrary view of the tax authorities (section 2.5 paragraph 17 of the UStAE, the VAT Application Decree) can therefore no longer be upheld.
Input VAT deduction for company events - BFH ruling V R 16/21, published on 27 July 2023
Company events are only fun for the participants - whoever is responsible for the tax treatment must keep a few things in mind. Until 2014, there was a legally unregulated correlation to the wage tax: what was not a wage was also not a free of charge disposal. This meant that the employer was allowed to claim an input VAT deduction from the expenses. However, the wage tax law was changed in 2015, which requires a partial separation of the VAT treatment from the wage tax.
Growth Opportunity Law draft - plans for e-invoicing
Remission of interest in the event of monthly deferral – BFH ruling (V R 30/20)
There are many different reasons why turnover is reported too late, and such a delay may result in interest charges. Under certain circumstances, however, this interest can be remitted if respectively insofar as the taxpayer has not gained any liquidity advantage from the delay. The BFH (German Federal Fiscal Court) is quite generous in this regard.
Spa taxes are not subject to VAT for freely and gratuitously accessible spa facilities – ECJ judgement "Gemeinde A" (C-344/22)
Members of a supervisory board or board of directors do not engage in economic activity even if their remuneration is variable
Members of a supervisory board or board of directors do not engage in economic activity even if their remuneration is variable – Opinion of the Advocate General of 13 July 2023 (C-288/22)
Cost pass-on – BMF letter dated 20 June 2023
If an entrepreneur passes on costs, there is always the question as to whether this is a remuneration for supply that is subject to VAT. The BFH (German Federal Fiscal Court) took a position on this question last year in connection with market fees for agricultural producer groups and with advance costs for slaughterhouses. The BMF (German Federal Ministry of Finance) has now adopted these positions by including them in the administrative guidelines to the German VAT Code (UStAE).
Isolated accommodation service can be a “TOMS” travel service - ECJ judgement C-108/22
In the "Alpenchalets Resorts" case (C-552/17), the ECJ had already ruled for holiday flats that a TOMS travel service does not have to consist of several components in order to be subject to margin taxation. The ECJ has now confirmed this for hotels in a Polish case.
No fixed establishment by subcontractors - ECJ judgement "Cabot Plastics Belgium SA" (C-232/22)
Having a fixed establishment requires having human and technical resources in the country concerned - the ECJ made this particularly clear in its Titanium ruling. Whether, and under what conditions, third-party resources can be considered as fulfilling this requirement has not been fully clarified. However, the ECJ has now added another piece to the puzzle by addressing the question of whether a closely associated subcontractor can be considered a fixed establishment of the principal.
BMF-Schreiben zu Anwendungsfragen bei dezentraler Besteuerung von Organisationseinheiten der Gebietskörperschaften Bund und Länder
Das Bundesministerium der Finanzen hat kürzlich ein neues Schreiben herausgegeben, in dem Regelungen zur dezentralen Umsatzbesteuerung von Organisationseinheiten der Gebietskörperschaften Bund bzw. Länder gemäß § 18 Abs. 4f UStG und Sondervorschriften für eine von den Vorschriften der AO abweichende Festlegung der örtlichen Zuständigkeit für die Besteuerung dieser Organisationseinheiten gemäß § 18 Abs. 4g UStG behandelt werden.