By virtue of the Fourth Corona Tax Relief Act of 19 June 2022, deadlines for submitting VAT returns have, once again, been extended. The annual VAT return 2020 can still be filed up until 31 August 2022, if filed by a professional tax consultant. Changed submission deadlines will also apply for the following years. With these changes, the legislator aims to create relief for taxable persons and advisors who are currently having to deal with enormous additional burdens due to the coronavirus pandemic, the Ukraine crisis and property tax reform. In our newsletter, we provide you with an up-to-date overview of the current deadlines.
Stadium visitors are sometimes not free to pay for their bratwurst (grilled sausage) and drinks using cash but instead must use a “stadium payment card”. But how is the deposit for the payment card, which has to be paid by the visitor, to be treated according to VAT law? In a recent decision, the Federal Fiscal Court dealt with a number of crucial considerations in this regard. Specifically, the supply for consideration and the VAT exemption of transactions with respect to payments and transfers made in connection with such deposit amounts.
The German Federal Fiscal Court has referred various questions to the ECJ on the VAT treatment of spa towns. Unlike in other cases, these towns specifically aim for the status of a taxable person in order to benefit from input VAT deduction.
With its referral, the German Federal Fiscal Court also seeks to clarify the question as to whether a supply for consideration can also exist if only a certain group of persons is obliged to pay a remuneration, which is of significance for all taxable persons.
The Federal Fiscal Court has expressed serious doubts about the lawfulness of the apportionment requirement for supplies of accommodation services. In justification, it refers to the ECJ submission of the V. Senate of the Federal Fiscal Court on the apportionment requirement for operating equipment. The decision on the suspension of execution thus brings fresh impetus to the discussion sparked by the ECJ judgment in the Stadion Amsterdam CV case as to whether the apportionment requirement for accommodation services is in conformity with EU law.
In the previous view of the German tax authorities, the VAT exemption for intra-Community supplies was to be dependent on the relevant EC Sales List being submitted or corrected in due time. Since the time this requirement was included in the German Administrative Circular in 2020, considerable doubt has existed as to whether this extremely strict view was actually acceptable under EU law. For some time now, there have been increasing loud whispers that the Federal Ministry of Finance would ultimately correct this. Now the time has finally come. In its letter of 20 May 2022, the Ministry clarifies that the VAT exemption cannot be denied solely on the basis of a failure to meet the deadline for the ECSL.
In its decision of 21 April 2022, the Federal Fiscal Court abandoned its previous generous case law on supplies in the sports sector. The national VAT exemption rule was classified as basically in conformity with EU law. The ruling also makes it clear that Union law allows the German legislator to exercise a quite generous scope of discretion. However, as long as the legislator does not make use of its possibilities in favour of sports clubs, taxable persons in the sports sector can no longer invoke Union law.
In its letter of 12 April 2022, the Federal Ministry of Finance commented, for the first time, on the ECJ judgment of 15 March 2007, the so-called direct claim (“Reemtsma claim”). Here, under certain conditions, recipients are granted a refund claim against the tax office, similar to input VAT deduction. However, the Federal Ministry of Finance has significantly restricted this claim. Union law is likely to oppose this narrow understanding of the Reemtsma claim.
In its recent ruling on city cards, the ECJ was given its first opportunity to comment on the application of the VAT Directive's voucher regulations, as they are in effect since 1 January 2019. The key question was whether city cards can even be classified as vouchers. While the ECJ went on to find that it is possible for the city card in question to be classified as a voucher, specifically a multi-purpose voucher, it failed to establish any general principles, resulting in the loss of an opportunity to create some degree of legal certainty for the treatment of comparable instruments.
From now on, the German tax authorities will allow shareholders and pre-incorporated companies to deduct input VAT from purchases that subsequently accrue to a company outside of a taxable supply. In its letter of 12 April 2022, the German Federal Ministry of Finance sets out the requirements for the deduction of input VAT and refers to the relevant case law of the ECJ and the German Federal Fiscal Court, that was issued some time ago. According to this, the purchased supply must be transferable to the company and lead to a (planned) investment transaction for the company. In practice, this leads to complex delimitation issues.
On 6 April 2022, the VAT Directive was amended with regard to reduced VAT rates. Germany has thus been given additional flexibility and can now more effectively implement its coalition agreement objectives. The reform is characterised by carrots and sticks. A new scope of discretion is opened up and unpopular issues are being eliminated.