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Umsatzsteuer Newsletter 22/2016
Transfer of an asset to a partnership
If an asset is transferred to a partnership, from a VAT perspective, this can be considered to be a transaction against remuneration or free of charge. The latter may lead to a definite VAT burden if the original purchase of the asset entitled to input VAT deduction. What is decisive is how the contribution is posted. The fiscal authority has now changed its view based on Federal Fiscal Court case law. Although the case law concerned the income tax treatment, the same is likely to apply to VAT. How capital accounts are defined and on which account the transfer is to be posted should always be examined.
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Umsatzsteuer Newsletter 21/2016
Sale-and-lease-back – Contribution to the balance sheet can be a taxable supply
In its judgment of 06.04.2016 – V R 12/15, the Federal Fiscal Court decided a case concerning sale and lease back transactions. The lessee developed an intangible asset which it was not permitted to enter in its balance sheet. Only as a result of establishing sale and lease back transactions, was the lessee ultimately able to include the cost of its item as an asset in its balance sheet. According to the Federal Fiscal Court, a contribution to the lessee’s balance sheet is deemed to be a taxable supply of services by the lessor.
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Umsatzsteuer Newsletter 20/2016
Holding companies and VAT groups – Part II
Following the ECJ decision in the proceedings Larentia + Minerva – judgment of 01.06.2016 (XI R 17/11), the Federal Fiscal Court has now handed down a second decision. It has determined that a management holding company is entitled to full deduction of input VAT amounts incurred in connection with the acquisition of shares in a subsidiary. It reiterates that a limited partnership, with a limited liability company as a general partner, (in the following: GmbH & Co. KG) is deemed to be a potential controlled company. We are pleased to hear that the XI Senate – unlike the V Senate – considers an organizational integration to be possible, even in the absence of the right to intervene.
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