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Umsatzsteuer Newsletter 20/2018
Interest on taxes unconstitutional?!
The 9th Senate of the Federal Fiscal Court has voiced “serious doubts” as regards the constitutionality of the interest rate on tax arrears. The rate is 0.5% per month (i.e. 6% per year). The court considers the interest rate to be “unrealistic” and that it violates the general principle of equal treatment pursuant to Art 3 para 1 of the German Constitution. Furthermore, the court regards the interest rate as excessive, thereby infringing Art. 20 para 3 of the German Constitution. As a consequence, taxpayers should appeal against interest assessments on tax arrears and apply for a stay of execution.
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Umsatzsteuer Newsletter 19/2018
German Federal Fiscal Court confirms right to choose applicable law on taxation of travel services
Companies receiving travel services have a choice as to whether to apply sec. 25 of the German VAT Act (which violates EU law) or art. 306 ff. of the EU VAT Directive. The German Federal Fiscal Court confirmed this in its judgment of 13.12.2017, which was published on 02.05.2018 (XI R 4/16). This allows companies to choose the most preferable taxation scheme, for themselves and for their customers, who ultimately have to bear the VAT burden. As a result, companies have a maximum degree of flexibility and can theoretically generate non-taxed turnover. This remains applicable until the legislator reacts and adapts sec. 25 of the German VAT Act.
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Umsatzsteuer Newsletter 18/2018
Triangulation supplies: ECJ eases restrictions and reduces risks
The ECJ has made triangulation supplies easier to carry out through its judgment in the case of Hans Bühler KG (judgment of 19.04.2018 - C-580/16). The simplification rule for triangulation supplies is also applicable if the intermediate is established or registered in the country of departure. This means that businesses could possibly avoid registrations abroad. The situation is to be analyzed against this background and the progress in the relevant countries is to be followed. The ECJ also restricts the importance of the formal requirements, as it views EC Sales Lists, which have not been filed or filed late, as being harmless. This could also apply to other formal requirements, such as invoicing.
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