According to a decision of the Supreme Tax Court the author of works of art for the purpose of the reduced VAT rate as provided in Section 12 (2) No. 13 VAT Act is the (intellectual) creator of the work and not his or her successor in title. The question of authorship for VAT purposes must be answered in accordance with the provisions of the Copyright Act.
The ECJ has held that the reduced VAT rate for books must be extended to e-books if the average consumer is likely to perceive the two products as essentially similar.
The reduced Value Added Tax (VAT) rate does not only apply to the rental of land and the buildings fixed to it, but also in general to the rental of living and sleeping quarters by an entrepreneur for the short-term accommodation of strangers. According to the Supreme Tax Court this also includes the renting of non-stationary living containers to harvesters (seasonal workers).
A Member State which provides for a reduced tax rate for supplies of firewood according to Article 122 of the VAT Directive may limit its scope to certain categories of supplies of firewood based on the combined nomenclature, provided that the principle of fiscal neutrality is observed. With this decision the European Court of Justice answered a request for a preliminary ruling by the Supreme Tax Court. The latter has now issued its final judgment in the case referred.
Services in connection with hotel accommodation are subject to the reduced VAT rate, this also applies to ancillary services – inasmuch as they immediately contribute to the letting of rooms.
Can an eloquent funeral speech be of artistic nature or comparable to performing artists and thus fall under the categories of services subject to the reduced VAT rate of 7 percent? No – says a tax court of first instance.
In a most recent judgment, the European Court of Justice held, that the German legislation which excludes the reduced VAT rate applicable to short-term accommodation services provided in hotels and similar establishments which are not directly used for that accommodation is not in breach of EU law. Those rules must, however, be applied to concrete and specific aspects of the categories of accommodation services referred to in point (12) of Annex III of the VAT Directive and ensure that the principle of fiscal neutrality is preserved.
Supreme Tax Court judges have expressed doubt both upon the previously uncontested obligation of entrepreneurs subject to the so-called imputed taxation (“Sollbesteuerung) to pre-finance VAT and upon the exclusion of the reduced VAT rate on the provision of holiday apartment rentals according to the so-called margin-scheme taxation. The Supreme Tax Court has therefore referred two cases to the European Court of Justice (ECJ) (i) referral of 21 June 2017: V R 51/16; and (ii) referral of 3 August 2017: V R 60/16.
When using a food-court in a shopping mall the services of a fast-food provider may not be a delivery of food (for which the reduced VAT rate is applicable) but rather a service subject to the standard VAT rate if - as the Supreme Tax Court points out in a most current decision - it is evident from the perspective of an average consumer that the provider of the food has a facility at his disposal on the nearby premises. This, e.g., may be the case if a tray is provided for transporting the purchased food to a consumption facility located in the food-court.
Following a preliminary request from the Münster Tax Court the ECJ ruled that the recipient of supplies of goods has a direct claim towards the tax authorities for reimbursement of improperly invoiced VAT he paid to the suppliers and which has been duly transferred by the latter to the treasury, even if the recipient can no longer turn directly to his suppliers for reimbursement due to the statute of limitation as provided for by national law.
In the course of the Tax Amendment Act 2025 a reduction of VAT for restaurant and catering services, with the exception of the sale of beverages, to seven per cent was introduced from 1 January 2026 (Section 12 (2) No. 15 of the Value Added Tax Act). The Federal Ministry of Finance (MoF) has recently issued a brief decree as to specific aspects of the new rule.
The Supreme Tax Court decided that delivering a print version of a newspaper and providing first-time access to an e-paper version of that newspaper are separate main services from a VAT point of view. They are not indivisible, they each serve a separate purpose for the customer, and the e-paper is not just used to read the print version of the newspaper under the best possible conditions. However, the e-paper did have no independent value of its own at the time because the total price of the subscription did not increase when access was granted for the first time.
Does an insurance broker, who makes- in addition to his brokerage activities -a brokered insurance product available to an insurance company, provide VAT-exempt services? The Supreme Tax Court considered this doubtful and decided on 5 September 2019 ( V R 58/17), to refer the question to the Court of Justice of the European Union (ECJ) for a preliminary ruling.
On 8 May 2019, the Federal Ministry of Finance published a draft bill for the proposed legislation on the further tax stimulation of electro-mobility and changes to other tax regulations.
In April 2024, the tax authorities commented on the VAT implications of online event services. This administrative circular has now been revoked and replaced by a revised circular issued most recently by the Ministry of Finance (MoF). The VAT Act Application Ordinance was adjusted accordingly.
In a referral from Portugal the ECJ was asked on the VAT situation in case of the supply of a subscription gift of small value in the form of tablets or smartphones to new subscribers of consumer protection magazines. In its opinion, the ECJ saw the circumstances of the case to suggest that the provision of a subscription bonus is an ancillary service connected with a main service because the bonus was only granted to increase the number of subscribers to the magazines and thus contributed to improve the profit situation of the plaintiff.
In a request for a preliminary ruling, the Supreme Tax Court has referred several questions to the ECJ regarding the compatibility of non-profit tax status and the prohibition of state aid under EU law. The question to be answered is whether the extension of tax relief for special-purpose entities to companies that provide services for remuneration in cooperation with a corporation that is recognized as a non-profit organization (so-called service corporation) constitutes illicit state aid in accordance with Art. 107 of the Treaty on the Functioning of the European Union (TFEU).
On 7 November 2019, the Bundestag approved the Act on the Further Tax Promotion of Electric Mobility and the Amendment of Further Tax Regulations (Finance Act 2019 – “FA19”) in the version recommended by the Finance Committee of the Bundestag.
