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Umsatzsteuer Newsletter 06/2017
Federal Fiscal Court partially simplifies correction in accordance with sec 14c para 1 sentence 2 of the German VAT Act
A Federal Fiscal Court decision which has recently been published on the elimination of the tax liability in accordance with sec 14c para 1 sentence 2 of the German VAT Act (decision of 12.10.2016 – XI R 43/14) should result in simplifications for some taxable persons. Rather than an invoice correction, it is now sufficient to issue a written assignment vis-à-vis the tax office. The Federal Fiscal Court left unanswered the question as to whether the elimination of the tax liability further requires that the supplier has actually refunded the collected tax amount to the recipient. Even after the ECJ decision in the legal case Senatex – C-518/14 the court is of the opinion that the correction has no retroactive effect.
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Umsatzsteuer Newsletter 05/2017
ECJ sticks to its principles – VAT-ID a relict of the past?
A VAT-ID is not necessarily a “real” VAT-ID. That was the problem the ECJ had to deal with in the case “Euro Tyre 2”. The ECJ unsurprisingly continued applying the basic principles of its recent decisions and came to the conclusion that the formal requirements are not substantive conditions for the VAT exemption. Hence, the VAT exemption cannot be refused solely on the grounds that the VAT-ID employed by the purchaser was not yet registered in the VIES, even if the supplier was aware of this fact. Apparently, the significance of VAT-IDs is being reduced more and more by the ECJ. This is only limited by fraudulent activities or if the substantive conditions for the VAT exemption cannot be proven because of the non-compliance.
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Umsatzsteuer Newsletter 04/2017
New hope for VAT groups
Large groups of companies find it difficult to establish the organizational incorporation for a VAT group. Most recently, the V. Senate interpreted this requirement very strictly. Now, the XI. Senate has deviated from that. An organizational incorporation can also exist without the managing director being both managing director of the parent company and the subsidiary. Thus, in particular, the general meeting’s rights to instruct, as well as the parent company’s managing director’s right to instruct vis-à-vis the subsidiary’s managing director, might be sufficient.
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