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Umsatzsteuer Newsletter 15/2025
Administrative services for dependent foundations: VAT liability looms
The German Federal Fiscal Court has issued its first ruling on the VAT liability of administrative services for dependent foundations. Contrary to what many observers had assumed, these administrative services are not (non-taxable) internal transactions. The specific facts of each case are crucial. Trustees of dependent foundations and other asset pools must now examine their contracts to determine whether they provide their services for consideration.
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Umsatzsteuer Newsletter 14/2025
Risk margin scheme: Most recent decisions and criminal investigations
The application of the margin scheme, in accordance with sec. 25a of the German VAT Act, is subject to strict requirements. Its application therefore involves considerable risks. Recent court decisions in fields such as used car sales, furniture upcycling, and online goods sales demonstrate this to be the case. Resellers wishing to apply the margin scheme should not blindly rely on information from upstream suppliers. The European Public Prosecutor’s Office is currently conducting criminal investigations into this issue in the motor vehicle trade sector.
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Umsatzsteuer Newsletter 13/2025
Grants for public transport – ECJ denies VAT liability for loss compensation payments
According to the ECJ, loss compensation payments for public transport are not subject to VAT. With this judgment, the ECJ also confirms the position of the German Federal Fiscal Court, according to which such grants are not generally subject to VAT. The special bonus: the input VAT deduction is not affected by the compensation payment either. We now have a little more legal certainty and clarity on the subject of grants.
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