The German government plans to increase VAT rates as from 1 January 2027. The formula is “21–10–0”, which simply means that the standard VAT rate is set to rise to 21% and the reduced VAT rate to 10%. In order to ensure that the VAT increase does not disproportionately affect low-income households, there are also plans to apply the zero VAT rate to foodstuffs.

In its judgment in Stellantis Portugal, the ECJ provides clarification on the VAT treatment of transfer pricing adjustments. In particular, it offers guidance on the distinction between a subsequent amendment to the taxable amount of already completed transactions and a separate supply for which the adjustment would constitute consideration. Of particular interest, also beyond the transfer pricing context, is the ECJ’s further elaboration on when the uncertain nature of remuneration is capable of breaking the direct link between the payment and the supply required for a transaction to be taxable.