A taxpayer who emigrated to the U.K. and who exercised his right under U.K. tax law to pay tax on income not earned in the U.K. on a "remittance basis" is caught by the preferential taxation regime of Sec. 2 (2) No. 2 Foreign Tax Act and subject to extended limited tax liability in Germany.
In a recent decision, the Supreme Tax Court held that - in the case of bank transfers - the chargeable VAT for payments is incurred at the time the respective amount is credited to the payee's current account, even if the value date is at an earlier point in time.
In a most recent ruling, the European Court of Justice (ECJ) held that, for situations where the output VAT is calculated at the time the remuneration is received rather when the service was completed, the German VAT provision that the right to deduct input VAT must be exercised upon completion of the supply or service is not in line with current EU law, in particular Articles 167 and 66 (1) of Council Directive 2006/112/EC.
