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Umsatzsteuer Newsletter 29/2022
Safety-net acquisition tax applies for using VAT-ID from country of departure - but not in case of double taxation
Chain transactions are sometimes wrongly assessed due to incorrect allocation of the transport. In such a case, there is often also the risk of a safety-net acquisition tax arising according to Art. 41 EU of the VAT Directive. The ECJ recently had to decide whether this provision also applies if the acquirer uses a VAT number from the country of departure. The ECJ went on to affirm this. However, it also limited the scope of application. This limitation should particularly be relevant for cases before implementation of the Quick Fixes. A double taxation due by virtue of the safety-net acquisition tax would violate the principles of EU law. If this approach is taken further, it must apply not only to chain transactions, but also to two-party constellations.
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Umsatzsteuer Newsletter 28/2022
Legislator reduces interest rate to 1.8% per annum
The legislator has reduced the interest rate for interest on arrears and tax refunds in accordance with secs. 233a and 238 of the German Fiscal Code from 6% to 1.8% per annum. The new interest rate applies to interest periods from 1 January 2019 onwards. This was decided by the German Bundestag (on 23 June 2022) and the German Bundesrat (on 8 July 2022). In doing so, the legislator intends to fulfil its obligation under the Federal Constitutional Court’s judgment of 8 July 2021 to newly regulate the amount of interest set down in sec. 233a of the German Fiscal Code. Unfortunately, the legislator fails to take the opportunity to further reform the interest regulations of the German Fiscal Code. Thus, for all other types of interest (in the case of suspension of execution, deferral, evasion, litigation), the rate remains at 6% per annum. Further court disputes are thus foreseeable.
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Umsatzsteuer Newsletter 27/2022
Pitfalls in the relocation of customer tools
Due to recent geopolitical developments and the resulting supply bottlenecks, supply chains are under scrutiny. Against this background, production is, in many instances, also being relocated to other countries, whether a manufacturer’s own or that of subcontractors (toll manufacturing / extended workbench). When assessing the VAT consequences, customers' tools should not be forgotten. The practical handling of tool purchases and sales is very often an ongoing challenge. But the relocation of tools can also be relevant for VAT purposes.
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