On 08.12.2021, the state ministries of finance issued a general ruling on appeal proceedings against interest assessments for in accordance with sec. 233a and 238 of the German Fiscal Code. This ruling rejects appeals against interest that accrued prior to 1 January 2019, as being unfounded.
Insofar as taxable persons have not yet paid the subject interest to the tax office, they must now prepare for a corresponding payment. Taxable persons who wish to raise doubts under EU law against the interest assessment will need to file a lawsuit within one year and may file a (renewed) application for suspension of execution.
+++ FRANCE ends prefinancing of import VAT and replaces the DEB +++ POLAND allows to opt for VAT for financial services and introduces e-invoicing platform and VAT groups +++ ROMANIA introduces voluntary e-invoicing for B2G and B2B +++ SLOVAKIA introduces measures to combat VAT fraud +++ UKRAINE taxes electronic services provided by foreign businesses +++ UNITED KINGDOM tightens rules on imports +++
As part of the "quick fixes", a uniform EU simplification regulation, for supplies to other EU Member States via warehouses located there, was introduced with effect from 1 January 2020. In a letter dated 10 December 2021, almost two years after the new sec. 6b of the German VAT Act actually came into force, the German Federal Ministry of Finance (BMF) has now published an introductory circular on this issue, which amends the German Administrative VAT Guidelines. Over 13 pages, the Ministry clarifies questions of doubt for practical handling and now finally also provides more legal certainty. An earlier publication would have been helpful. But as the saying goes, better late than never ...
The transport of export goods is, under certain conditions, exempt from VAT (sec. 4 no. 3 lit. a lit. aa of the German VAT Act). However, as from 1 January 2022, the Federal Ministry of Finance will considerably restrict the present scope of the VAT exemption. While all transport services in connection with exports were previously VAT exempt, this will now only apply to transport services rendered directly to the supplier of the goods or to the customer receiving the goods.
In a letter dated 1 December 2021, the German Federal Ministry of Finance adopts the principles of the business-friendly judgment of the German Federal Fiscal Court for the purposes of the "customary trade description" in invoices. Henceforth: What is usually accepted among merchants as a description of goods and services rendered is sufficient for the purposes of input VAT deduction as regards the customary commercial description of what was supplied. This simplification applies equally to all traders. However, the taxpayer bears the burden of proof as to what is considered customary. Proper invoices thus remain a frequent target of the tax authorities when it comes to VAT.
The Federal Ministry of Finance's letter on the VAT exemption for cost sharing groups, in accordance with sec. 4 no. 29 of the German VAT Act, is finally coming. Although it is still a draft letter, the Federal Ministry of Finance seems to be in the mood for Christmas. The Federal Ministry of Finance’s current point of view gives hope that at least some forms of cooperation will, in future, be able to take place without additional VAT charges. This applies, in particular, to groups of public bodies and non-profit institutions.
The coalition agreement has been sealed. The new federal government has made a real effort to modernise VAT (e-invoicing, reverse charge and import VAT) and, at the same time, to support activities for the common good (in-kind donations, supplies of educational services, inclusive businesses). It is just a pity that the long-awaited reform of the VAT group cannot be expected any time soon. However, we will keep trying.
The ECJ (case C-324/20) has ruled that, in the case of an instalment payment extending over five years, the respective VAT is chargeable at the time the supply of service is rendered. This decision differs from that made by the ECJ in the case of a player’s agent who was paid over three years for a supply of agency business services to a football club. However, the ECJ did not specify clear criteria for demarcation in this respect. In practice, it is recommended that full VAT be claimed from taxable persons entitled to input VAT deduction at the very outset of an instalment payment agreement.
In its recent decision of 21.10.2021 – C-80/20, Wilo Salmson, the ECJ clarifies that a taxable person must have an invoice in order to claim an input VAT refund. However, the court also makes it clear that the concept of an invoice is to be understood very broadly. The ECJ distances itself, consciously or not, from the minimum mandatory information for the acceptance of an invoice entitling the recipient of a supply to deduct input VAT as laid down by the German Federal Fiscal Court (most recently in the ruling of 12.03.2020 - V R 48/1) and the German Ministry of Finance (letter of 18.09.2020).
The German Ministry of Finance (BMF) recently provided a draft of a BMF Circular entitled “VAT assessment of transactions in the fuel card business” to industry associations with a request for comments to be provided by 4 November 2021. The BMF Circular is intended to take effect as early as 01.01.2022. If it comes into force in the currently planned version, the BMF will overturn the customary structure of fuel card transactions and follow the ECJ in the Vega International case: fuel card transactions will generally be considered credit services. This results in an urgent need for action for all parties involved.