VAT adjustments under sec. 17 of the German VAT Act due to irrecoverability are a routine feature in corporate insolvency proceedings. In a recent landmark decision (judgment of 18 December 2025 – V R 34/23), the German Federal Fiscal Court (BFH) permits a second adjustment of VAT to the detriment of the insolvent estate, even where a relieving first adjustment in favor of the pre insolvency assets was not carried out. This may result in a double VAT burden. Insolvency administrators and custodians (Sachwalter) should therefore focus on ensuring that the first adjustment is carried out in a timely manner.

Following the US Supreme Court’s ruling that President Donald Trump’s IEEPA customs tariffs were unlawful (KMLZ Customs Newsletter 03 | 2026), US Customs is now proceeding with a large-scale refund process. Businesses can submit and calculate their claims online. Refunds will then be issued collectively for all affected importations of goods.

In its letter of 9 April 2026, the Federal Ministry of Finance clarifies the VAT status of entities without legal capacity. In particular, it comments on the treatment of communities by undivided shares following the amendment of sec. 2 para. 1 of the German VAT Act (UStG) by the Annual Tax Act 2022. This newsletter contextualises the administrative view, highlights the key points of the Federal Ministry of Finance’s letter and identifies which questions remain unresolved.