Tax & Legal

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 ECJ has held that a decision by the tax office to base the recoverable input tax of a bank on the portion of taxable leasing turnover reflecting the interest only is acceptable if it better reflects the actual use made of the inputs.

The Supreme Tax Court has laid a second case before the ECJ on the division of input tax incurred in the construction and operation of a dual-use building between taxable and exempt activity.

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 ECJ has held that a German tax consultant cannot deduct the input tax on the acquisition of an intangible from one partnership for use by another for lack of his own economic activity.

The finance ministry has issued a decree on supplies from a fraudulent supplier to the effect that the input tax is deductible if the recipient did not know of the fraud and otherwise acted in good faith with due care.

The Supreme Tax Court has held that a customer may fully deduct the VAT charged on a supply in accordance with community law, even if national law prescribes a lower rate.

The Supreme Tax Court has followed an ECJ judgment in holding that the VAT-free intra-community sale of goods does not allow an input tax deduction that would be excluded for the same sale on the home market.

The Supreme Tax Court has held the tax office to be correct in insisting that a gaming hall operator apportions his inputs by turnover, rather than by space used, where the physical division was only temporary.

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 Supreme Tax Court has held that the input tax on general expenses cannot be allocated between taxable and tax-free turnover if, in the event, no tax-free turnover is achieved in the year in question.

The Supreme Tax Court has upheld the letter of the law providing that a credit note loses its invoice status as a voucher for input tax deduction on rejection by the recipient – regardless of whether or not the rejection is justified.

The ECJ has held that the input tax on the costs incurred by managing directors in defending themselves against criminal charges was incurred in a private capacity and was thus not deductible against the output tax on the business turnover.

The Supreme Tax Court has held that a foreign business required to file a VAT return for the year, does so for the full year. Its input tax can therefore be recovered in full.