In its two letters dated 1 April 2026, the Federal Ministry of Finance (BMF) has provided fundamental clarifications regarding the VAT group and the adjustment of input VAT deduction in the event of changes in use between taxable activities and non-economic activities in the narrow sense. Those particularly affected are legal entities under public law, non-profit organisations and holding companies. The new administrative interpretation extends the VAT group to non-economic activities. At the same time, it opens up new room to manoeuvre in the case of subsequent changes in use. This has significant implications for the VAT practice.

The sale of a business entails VAT-related risks. The central question is often whether a transfer of a going concern in accordance with sec. 1 para. 1a of the German VAT Act exists. In recent decisions, the Federal Fiscal Court has denied a transfer of a going concern in instances where: • the acquirer of a business merely subleases it without continuing or reselling it themselves (no consecutive transfers). • the seller continues their economic activity unchanged after the sale (e.g., a solar park operator continues feeding electricity into the grid unchanged).

Voucher or not a voucher? The answer to this question is crucial for the correct VAT treatment. Two recent ECJ judgments illustrate the subtle yet decisive criteria distinguishing vouchers from discounts and from instruments that already constitute the consumable benefit itself. As is so often the case, everything depends on the specific design of the instrument in the individual case. With its decisions, the ECJ provides greater clarity for customer loyalty programmes and digital instruments, while at the same time opening up new scope for structuring. Companies should now critically review their existing models.