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Umsatzsteuer Newsletter 34/2018
Correction of VAT liability in accordance with sec 14c para 1 requires repayment of the VAT
According to the Federal Fiscal Court, (decision of 16.05.2018 – XI R 28/16), any correction of VAT liability in accordance with sec 14c para 1 sentence 2 of the German VAT Act (= sec. 203 of the VAT Directive) requires, in addition to the correction of the invoice, that the supplier has paid back the wrongfully invoiced VAT amount to the customer. In the absence of such a repayment, the supplier would be unjustly enriched. For taxable persons this means that they often have to pre-finance the respective VAT amount. Further, they may declare the correction of their VAT liability to the tax office only during the reporting period of the repayment not earlier. However, there are still likely to be constellations where a repayment to the customer is irrelevant.
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Umsatzsteuer Newsletter 33/2018
Right to input VAT deduction by virtue of “subsequent” allocation decision
In its judgement of 25.07.2018 in the legal case C-140/17 the ECJ ruled that a municipality can become entitled to input VAT deduction by virtue of a subsequent allocation decision. According to the ECJ, an input VAT correction is not ruled out merely because the public body used an asset exclusively on behalf of the government at the time of its acquisition. The ruling gives hope to both public and private bodies that the previous static allocation of assets to the non-economic sector, at the time of their acquisition, will ultimately become a thing of the past.
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Umsatzsteuer Newsletter 32/2018
Electronic marketplaces shall be liable for tax shortfalls – now, it’s the online retailers’ turn
Operators of electronic marketplaces shall be held liable for the VAT owed by other companies who used the marketplace to sell goods in Germany without paying VAT. According to the government's draft of the law to avoid VAT shortfalls on the trade with goods on the Internet, operators are to be encouraged to cooperate only with companies who can prove they are registered in Germany. Otherwise the operators may be held liable for the VAT not paid.
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