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Umsatzsteuer Newsletter 05/2019
Quick Fix re chain transactions within the EU – Implementation of a definition and regulations concerning the allocation of the transport
On 4 December 2018, the ECOFIN adopted the so-called Quick Fixes, to operate as of 1 January 2020. The regulations on chain transactions are one central and long-awaited component thereof. However, the new Art. 36a EU VAT Directive only concerns itself with chain transactions within the EU and further restricts itself to cases in which an intermediate party orders the transport. There are no regulations on chain transactions with third countries or regarding cases where the first supplier or the last recipient orders the transport. In any event, companies must now use the time remaining until the end of the year to adapt their processes to the new regulations.
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Umsatzsteuer Newsletter 04/2019
Quick Fix regarding consignment stocks – Implementation of a EU wide simplification rule
On 4 December 2018, the ECOFIN adopted the so-called Quick Fixes, to operate as of 1 January 2020. These also include an EU-wide simplification rule for consignment stock cases. Standardisation and simplification are of course to be welcomed. However, it should be noted that the recent case law of the Federal Fiscal Court remains applicable. In addition, entrepreneurs must consider how the various requirements can be fulfilled in practice on a permanent basis. Alternatively, they will have to consider whether and how to actively deselect the application of the simplification rule in order to avoid inconsistencies.
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Umsatzsteuer Newsletter 03/2019
Reduced VAT Rate for e-Books – Optional or Mandatory for Member States?
Since 4 December 2018, the Member States have been free to apply the reduced VAT rate to e-books. In our opinion, applying the reduced VAT rate should now be considered mandatory. E-book suppliers would, in particular, benefit. If they have agreed upon gross prices with their customers, the reduced VAT rate increases their margin. Taxable persons, such as libraries, universities or other public institutions, which are often not entitled to input VAT deduction for the purchase of electronic publications from abroad but have to pay VAT (reverse charge scheme), would also benefit. However, the changed legal situation can pose new VAT challenges e.g. in instances where the various contents of databases are to be treated differently.
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