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Umsatzsteuer Newsletter 31/2021
ECJ allows for different VAT treatment of amusement parks and fun fairs
A roller coaster ride at the fun fair is cheaper than in the amusement park. The ECJ allows for different VAT rates of location-dependent carnivals in the form of amusement parks on the one hand and location-independent carnivals on the other. It confirms the fundamental compatibility of this German taxation practice with EU law, provided that the principle of neutrality is observed, i.e. equal services are treated equally.
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Umsatzsteuer Newsletter 30/2021
Provision of operating equipment in the case of leasing: single supply or separate supplies?
The German Federal Fiscal Court has submitted a question to the ECJ that is also of central importance for the deduction of input VAT, namely: What is the procedure in the case of leasing with simultaneous provision of operating equipment? Is this a single (VAT-exempt) rental service, or is there a general requirement to split the service up? The practice hopes for more legal certainty on this issue following clarification by the ECJ. To date, the correct assessment under tax law has been similar to playing the lottery. The German Federal Fiscal Court hopes that clear guidance from the ECJ will make it easier and faster to clarify many individual issues in practice.
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Umsatzsteuer Newsletter 29/2021
German interest rate of 6% for tax refunds and tax arrears unconstitutional as of 2014
In its decision published on 18.08.2021, the German Federal Constitutional Court declared the interest rate of 6% p.a., pursuant to sections 233a and 238 of the German Fiscal Code, to be unconstitutional. This applies to interest periods from 01.01.2014 onwards. However, at the same time, the Federal Constitutional Court ordered that the unconstitutional provision can, nevertheless, continue to be applied to interest periods until the end of 2018. Only for interest periods dating from 01.01.2019 is the legislator obliged to pass a new (retroactive) regulation. This new regulation must be put in place by 31.07.2022. The Federal Constitutional Court has now ruled on interest concerning a trade tax claim. In the case of interest on VAT liabilities, doubts remain as to whether the interest rate and the assessment of interest in general are in accordance with EU law. Taxpayers could take advantage of these doubts as regards the past.
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