For many years, private clinics have been fighting for VAT exemption on their services. Many tax audits are stuck because the conditions for VAT exemption are highly controversial. A ruling by the German Federal Fiscal Court (BFH) could point to a compromise. The issue is that the part of the service provided by the private clinic that constitutes ‘medical treatment’ could be VAT exempt, while the part that constitutes ‘accommodation’ could be subject to VAT. However, this is only possible if, in each individual case, both components constitute a separate service. If this division is not considered possible, the situation remains unchanged: 100% VAT exempt or 100% subject to VAT.

In its letter dated 31 March 2025, the Federal Ministry of Finance has made a 180° turn on its previous administrative practice concerning the operation of energy generation plants. In the case of decentralised consumption of electricity (so-called direct consumption), there is no (longer) a back and forth supply of electricity under VAT law between the operator of the energy generation plant (photovoltaic, biogas plants and cogeneration units) and the grid operator. In addition, the Federal Ministry of Finance has revised the use of heat, which is a contribution of goods without consideration, in CHP plants. Action is required by 1 January 2026.