Tax & Legal

The European Court of Justice (ECJ) upheld an action for breach of contract brought by the EU Commission against Germany in two of three claims. Germany had violated EU law insofar as it systematically refuses to request the information missing in an application for a VAT refund of foreign taxpayers and instead immediately refuses the refund applications in such cases if such information can be provided only after the 30 September deadline.

The finance ministry has issued a decree forbidding foreign businesses from reclaiming the VAT invoiced to them on exports or intra-community supplies from Germany.

The Supreme Tax Court has confirmed the Central Tax Office’ rejection of a foreign business VAT refund claim because the form had not been completely filled out.

The Supreme Tax Court has held that a business of uncertain residence that has invoiced its German sales with VAT must recover its input tax through the return that must be filed, regardless of whether the VAT invoices were rightly or wrongly issued.

The finance ministry has decreed that a Supreme Tax Court case requiring a foreign business to file a full VAT return of all German inputs and outputs where its only taxable output is a VAT invoice issued in error should only be followed by foreign businesses whose refund claims have been rejected in error.

The Supreme Tax Court has held that a foreign business should file an annual return for VAT showing its entire recoverable input tax for the year if it owed output tax at any time during the year for any reason.

The ECJ has held the June 30 deadline for foreign business to file VAT refund claims to be mandatory. Claims filed later cannot be accepted.

The finance ministry has issued a decree on the changeover procedures for a foreign business making taxable turnover in Germany for the first time.