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According to the new regulatory regime of sec. 2b of the German VAT Act, non-taxable cooperation against payment between legal entities under public law is only possible under very specific conditions of sovereignty. In its letter of 14.11.2019, the Federal Ministry of finance has now further restricted the provision of sec. 2b para. 3 no. 2 of the German VAT Act, with the conclusion: Started out a tiger and ended up a bedside rug.
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Umsatzsteuer Newsletter 44/2019
Do grants and subsidies from a third party form part of the VAT base? The ECJ answered this question in the affirmative in the proceedings C-573/18 and C-574/18. The case concerned the financing of capital goods via an operational fund. The decision shows the means by which the tax authorities attempt to make subsidies or grants de facto subject to taxation.
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In May 2019, the ECJ ruling in Vega on fuel card transactions was issued, following on from the earlier ECJ decision in Auto Lease Holland. The fuel card sector previously considered the two judgments to be of little relevance, given that they concerned individual cases. However, Austria is now proving that these decisions have the potential for significant impact. The current draft of the Austrian VAT Guidelines update strikes at the core business of fuel card companies: chain transactions will no longer be possible. Fuel will be regarded as being supplied directly from the petrol station operator to the cardholder. Fuel card issuers will be considered to provide a supply of services, possibly even VAT-exempt credit services. This will also apply to toll transactions. All companies involved in the fuel card business will be affected, possibly from as early as November 2019.
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