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Umsatzsteuer Newsletter 12/2021
E-Commerce: Federal Ministry of Finance comments on changes regarding distance sales as of July 2021
The fundamentally revised regulations on distance sales will come into force on 01.07.2021. In view of the ongoing pandemic, the question arose as to whether their entry into force would be postponed yet again. In the meantime, it is now certain that there will be no further postponement. The German Ministry of Finance published a letter of guidance on the new regulations on 01.04.2021. We will discuss the content of the letter in two newsletters. In this newsletter, we present the highlights contained in the Ministry’s letter, from the perspective of a distance seller. Our next newsletter will present the changes with reference to online marketplaces.
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Umsatzsteuer Newsletter 11/2021
Non-taxable grants to non-profit institutions
In its decision of 23 September 2020 (XI R 35/18), the Federal Fiscal Court held that financial allocations from shareholders to a joint subsidiary can constitute genuine (non-taxable) grants. The mere exercise of the shareholders’ general interests is not sufficient to assume a taxable supply. The Federal Fiscal Court has now clarified its previous restrictive jurisprudence based on recent ECJ judgments. It is also to be welcomed that the Federal Fiscal Court interprets the concept of competition within the meaning of Art. 132 lit. f) and I) of the EU VAT Directive in a restrictive manner.
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Umsatzsteuer Newsletter 10/2021
VAT also on discarded goods?
The Federal Ministry of Finance has commented, in detail, on the question as to how in-kind donations to charitable institutions should be treated from a VAT perspective. The tax authorities intend to distinguish between items that are no longer marketable, items which have limited marketability, and marketable items, and want to determine the taxable amount accordingly. This approach may result in tax disputes. A better approach would have been to deny a taxable supply carried out free of charge in the first place.
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