On 8 November 2018, the Finance Bill 2018 was adopted by the German parliament and received the consent of the Bundesrat on 23 November 2018 in the form of “The Act for the Avoidance of VAT Losses on the Trading of Goods on the Internet and Amendments to other Tax Regulations”(hereafter “Finance Act 2018”). This article sets out a selection of the new regulations. Continue reading
Tax & Legal
The Supreme Tax Court has referred a number of questions to the European Court of Justice in connection with the deduction of input tax on thermal power units where the supply did not take place and in connection with the adjustment of the deduction of input tax paid on a payment on account. The cases under review concerned supplies of good which did not take place due to fraud and the related adjustment of the input tax deduction. Continue reading
On 20 December 2017 the European Court of Justice (ECJ) held that the divergent VAT treatment of discounts granted by pharmaceutical companies (i.e. trader/entrepreneur for VAT purposes) to statutory (public) health insurance funds and private health insurance funds constitutes an infringement of EU law. The ECJ followed the Advocate General’s opinion and confirmed the doubts of the German Supreme Tax Court which had referred the question to the ECJ under reference V R 42/15. Continue reading
On 4 October 2017 the European Court of Justice decided that a finance lease with an option to purchase should be qualified as a “supply of goods” where the exercise the option appears to be the only economically rational choice that the lessee could make at the appropriate time. As a result the whole of the VAT becomes due when the object to be leased is handed over. Continue reading
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. Continue reading
here an entrepreneur undertakes to enter into a tenancy (landlord and tenant) for a consideration, the supply is tax exempt according to Section 4 No. 8 (g) VAT Act. Continue reading
In this issue: Official ponouncements, Supreme Tax Court Cases and From Europe Continue reading
The Supreme Tax Court held that services provided by a US-resident online-dating agency to German resident private users constituted electronically supplied services, with their place of supply in Germany. Continue reading
The ECJ has held that there is no basic requirement on a member state to ensure that its tax authorities take the same position for both parties to a transaction.