Since its inception in 2009, the German requirement to apportion supplies of accommodation services (eg, hotel accommodation with breakfast) has been heavily criticised: it is said to be purely politically motivated (“Mövenpick tax”) and to violate the principle that the supply of an ancillary service (eg, breakfast) shares, from a VAT perspective, the fate of the main supply (accommodation). The European Court of Justice (ECJ) now brings clarity to all of the controversial discussions, and rules that the apportionment requirement is in accordance with Union law.

The German Federal Court of Justice (BGH) recently ruled that monthly/quarterly VAT returns and the annual VAT return are separate procedural acts. This change in the BGH’s jurisprudence has practical implications for VAT compliance, including the VAT reporting process, corrections, and the documentation of the VAT return preparation process. Amendments to correct errors that become apparent later should no longer be made in the annual VAT return or in the monthly VAT return for December. Instead, each incorrect monthly/quarterly VAT return should be amended immediately. Internal control systems on the level of each monthly/quarterly VAT return or even on a transactional basis becomes more important.

According to the German Federal Fiscal Court, membership fees of 86,000 sports associations are to be subject to taxation going forward. This has caused considerable uncertainty among volunteers. It is now up to the legislator to rectify this by extending the VAT exemption for sport. This is possible under EU law. Sports clubs must adapt to the new perspective. Even today, there are already winners and losers.