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Umsatzsteuer Newsletter 42/2021
VAT exemption of export transport services as from 1 January 2022
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.
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Umsatzsteuer Newsletter 41/2021
Invoices: Federal Ministry of Finance on requirement of „customary trade description“
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.
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Umsatzsteuer Newsletter 40/2021
(New) Federal Ministry of Finance draft on VAT exempt cost sharing groups – it's Christmas time!
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.
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