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Umsatzsteuer Newsletter 09/2021
Input VAT Deduction for Intra-Community Acquisitions and Services – Tense Relaxation
German taxable persons are relaxed when it comes to deducting input VAT from intra-Community acquisitions and services. The German VAT Act does not impose any formal requirements for the deduction of the corresponding input VAT. This is often different in other EU Member States. Therefore, it is risky to transfer the German ‘understanding’ of such transactions to other EU countries. In the worst case, violations can result in the refusal of input VAT deduction. In its judgement of 18.03.2021 (Case C-895/19), the ECJ considered a Polish provision to infringe EU law. However, this amounted to only one mine in a rather extensive minefield.
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Umsatzsteuer Newsletter 08/2021
ECJ confirms: Taxable supplies between head office and branch possible
In general, the allocation of costs between branches of one taxable person is not subject to VAT. However, there are exceptions to this rule. The ECJ previously established this in the case Skandia America and has now confirmed it. This judgment is interesting for all taxable persons having branches in other countries if at least one of these branches is part of a VAT group int the respective country. According to the ECJ, supplies between these branches can be taxable. This results in financial implications in cases where the recipient is not entitled to full input VAT deduction. All other taxable persons “merely” have to observe the correct legal consequences from a VAT perspective.
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Umsatzsteuer Newsletter 07/2021
Import VAT in the UK - HMRC clarifies requirements for import VAT deduction
In principle, only the person who has the right to dispose of the imported goods when the customs declaration is filed may claim import VAT as input VAT. In 2019, the UK authorities HMRC startled companies and trade organiza-tions. Since this rule has not always been adhered to in the past, HMRC not only wanted to enforce the rule more strictly but (perhaps unintentionally?) tightened it significantly. Having retained its view in 2020 – despite a large number of submissions from the business community – HMRC is now taking a significant step backwards. However, the deduction of import VAT remains demanding. Taxable persons should act with due diligence.
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