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Umsatzsteuer Newsletter 04/2017
New hope for VAT groups
Large groups of companies find it difficult to establish the organizational incorporation for a VAT group. Most recently, the V. Senate interpreted this requirement very strictly. Now, the XI. Senate has deviated from that. An organizational incorporation can also exist without the managing director being both managing director of the parent company and the subsidiary. Thus, in particular, the general meeting’s rights to instruct, as well as the parent company’s managing director’s right to instruct vis-à-vis the subsidiary’s managing director, might be sufficient.
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Umsatzsteuer Newsletter 03/2017
Consignment stock: Direct supply despite temporary storage
Supplies via consignment stocks are deemed to be direct supplies to the customer and any interim storage will remain unconsidered if the recipient is already known at the beginning of the transport. This is the decision of the Federal Fiscal Court (V R 31/15) published yesterday. The Court came to the same conclusion as that reached by the lower tax courts in their decisions of the past two years. The Federal Fiscal Court thereby opposes the current undifferentiated opinion of the fiscal authorities. This will be welcome news for some foreign suppliers who will therefore be able to avoid registration in Germany. However, practical difficulties might arise, e.g. the time difference between the beginning of the dispatch and the invoicing or the interaction with commercial law and income tax law. In any case, consignment stock agreements and their handling now need to be checked.
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Umsatzsteuer Newsletter 02/2017
New forms with qualified free-text field – opportunities, risks and action required
The Act for Modernization of Taxation aims to enhance the exclusive automatic assessment. By implementing a new “qualified free-text field” the taxpayer is given the opportunity of having his VAT return dealt with by an official. This should minimize the risk of fiscal offences. Vice versa, refraining from entering information in this field might also give rise to such a risk. Special care should therefore be taken regarding the proper handling of the free-text field.
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