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Umsatzsteuer Newsletter 32/2021
Federal Ministry of Finance: Warning notices will be subject to VAT from 01.11.2021 onwards
Warning notices issued from 01.11.2021 onwards are subject to VAT. This is stated in the German Federal Ministry of Finance’s (BMF) recent letter dated 01.10.2021. In its 2016 decision (XI R 27/14) and its 2019 decision (XI R 1/17), the German Federal Fiscal Court assumed that a person issuing a warning notice provides a supply of services to the person being warned that is subject to VAT. The BMF now agrees with this view. For warning notices issued before 01.11.2021, the BMF letter contains a non-objection provision. Those issuing warning notices and their advisors must be prepared for this new administrative practice.
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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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