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Tax & Legal

Input VAT deduction available despite missing details on the date of supply


For the purposes of input VAT deduction, the necessary information about the tax point (the date of the supply) may be inferred from the date on which an invoice was issued, if it can be assumed that the service was provided in the month in which invoice was issued.  The Supreme Tax Court also confirmed European Court of Justice case law, according to which a retroactive adjustment of the invoice reverts to the year of its issue. Continue reading

ECJ decision German CFC regulations published on 31 May 2018


On 31 May 2018, the European Court for Justice (ECJ) published its decision in the Hornbach-Baumarkt case. The case revolves around the question as to whether Section 1 of the Foreign Transaction Tax Act (“FTTA” – in the version in force in 2003) – which calls for income corrections to be made on related party transactions, which are not considered to have been concluded at arm’s length – is considered compatible with EU law. Continue reading

Deduction of input tax on future supplies in cases of subsequent fraud: ECJ to clarify on 31 May 2018


The ECJ is to clarify the circumstances in which a future supply of goods or services should be considered to be sufficiently certain, for the purposes of the VAT Directive,  to permit deduction of the VAT paid by the recipient on account, even when the supply ultimately does not take place because of fraud on the part of the supplier.

Also: Do the German provisions, according to which the adjustment of input tax deductions depends on the repayment of the down payment, conflict with the VAT Directive?

 

Joint cases: C-660/16 and C-661/16, Kollroß / Wirtl

ECJ decision German CFC regulations to be published on 31 May 2018


The publication of the decision of the European Court for Justice (ECJ) in the Hornbach-Baumarkt case is scheduled for 31 May 2018. The case revolves around the question whether Section 1 of the Foreign Transaction Tax Act (“FTTA” – in the version in force in 2003) violates the freedom of establishment. The section in question calls for income corrections to be made on related party transactions which are not considered to have been concluded at arm’s length. Continue reading

ECOFIN-Council formally accepts the changes to the Mutual Assistance Directive in relation to the reporting obligation for cross border arrangements (DAC6)


In its sitting on 25 May 2018, the ECOFIN council formally accepted the Directive to amend the Mutual Assistance Directive 2011/16/EU to provide for the mandatory exchange of information in the area of taxation for reportable cross-border arrangements. ECOFIN had already reached a political agreement on the planned reporting obligation for cross-border tax arrangements at its plenum on 13 March 2018. Continue reading

Federal Finance Ministry circular on the tax treatment of salaries for tax treaty purposes is updated.


The Federal Finance Ministry circular of 12 November 2014 on the taxation of salaries for tax treaty purposes has been revised by a committee made up of from both the Federal and the States’ governments. The new version recognises OECD developments as well as recent case law and relevant changes in the legislation. Continue reading

Statutory interest rate levied on late payment of taxes no longer up-to-date?


The Supreme Tax Court has serious doubts as to the appropriateness of the current fixed rate of interest on late payments which is levied at a rate of 6 per cent per annum. This is especially relevant when considering the generally low interest rates level which have been charged in the market for some considerable time. Continue reading

Principle of deemed single uniform compensation


Where an employer contractually obliges himself to make several payments to an employee in connection with a termination of employment, the payments will only be considered as a single uniform compensation payment if there is clear evidence that all instalments were paid “as compensation for lost income or expected loss of income”. Continue reading