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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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Umsatzsteuer Newsletter 28/2021
(Value Added) Tax relief for businesses affected by the flood and aid workers
In mid-July, severe storms hit large parts of Germany and caused enormous damage. The regions worst affected were in Rhineland-Palatinate and North Rhine-Westphalia, but also in Bavaria and Saxony. The tax authorities have reacted to this disaster by means of the introduction of a variety of equitable regulations. This should at least mitigate the financial damage caused to affected businesses. In addition, the enormous willingness of companies to help with the disaster relief is to be promoted by refraining from taxing supplies carried out free of charge and the adjustment, for a limited period of time, of input VAT in accordance with sec. 15a of the German VAT Act.
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Umsatzsteuer Newsletter 27/2021
Distance Sales: OSS procedure and still compulsory registration in other EU Member States?
The main objective of the OSS procedure is explicitly to provide taxable persons with a solution that is as lean and unbureaucratic as possible. However, according to information from DATEV, this simplification will not be available in the foreseeable future, at least not for existing registrations. Corrections to supplies and services that were made prior to a taxable person’s use of the OSS procedure should only be taken into account in the procedure where they have been declared initially. In practice, however, this would involve a disproportionately high effort.
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