13
2022
The Federal Fiscal Court recently had to decide the rather exciting question of whether in-game renting services fall within the scope of German VAT. It ultimately found that they do not. However, the Court ruled that any exchange of in-game currency for real money on an exchange platform managed by a gaming operator does constitute a supply of service within the scope of German VAT. The consequences for gaming operators and players are significant.
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12
2022
Not every grant is subject to VAT. The Federal Fiscal Court‘s decision of 18 November 2021 (V R 17/20) marks a change in its jurisprudence. The assessment of whether a grant is subject to VAT is not only based on the underlying legal relationship between the grantor and the recipient of the grant. The “economic reality” of the situation is also crucial.
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11
2022
The war in the Ukraine is causing worldwide horror but has also given rise to a wave of solidarity. Both private taxable persons and public sector companies are providing support in a variety of ways. For example, sports halls and holiday flats are being turned into emergency shelters. Taxable persons are helping through in-kind donations and money. The tax authorities are supporting this collective commitment of society through (value added) tax relief.
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10
2022
The Federal Fiscal Court granted a municipality input VAT deduction from the construction of a suspension rope bridge, despite no consideration having been charged for the use of the bridge. Following the jurisprudence of the ECJ in the legal case Sveda, the Federal Fiscal Court recognised the direct and immediate link due to the proximity of the bridge to paid parking spaces. A very welcome windfall for the plaintiff municipality. However, the Federal Fiscal Court’s decision of 20 October 2021 (XI R 10/21), which was only published last week, is not just interesting for legal entities under public law. Rather, the Federal Fiscal Court provides numerous indications that input VAT deduction may also be possible for procured supplies which, at first glance, are not directly and immediately linked to taxable output supplies.
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09
2022
The German Federal Fiscal Court has changed its previous case law and henceforth no longer allows any VAT exemption for swimming lessons. As expected, it thus follows the ECJ decision Dubrovin & Tröger GbR – Aquatics (C-373/19). Accordingly, the scope of application of the VAT exemption for educational services is now severely restricted. At the same time, however, the German Federal Fiscal Court provides valuable advice on how to charge for services without VAT in the future. All providers of educational services are affected by the decision and should now examine the VAT assessment of their courses and events.
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08
2022
+++ EU member states take measures to fight inflation +++ CROATIA lowers VAT rates on various everyday goods +++ FRANCE grants transitional period for import VAT declaration and obtains authorization to introduce e-invoicing +++ POLAND temporarily lowers VAT rates on food, beverages and agricultural products +++ ROMANIA publishes list of goods, for which e-invoices must be issued +++ SERBIA further postpones mandatory use of e-invoices +++ SLOVENIA introduces reverse charge +++ UNITED KINGDOM to introduce plastic tax in April 2022 +++
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07
2022
Positioned at the interface between VAT and insolvency law, sec. 55 para 4 of the German Insolvency Statute (InsO) is of crucial importance to the tax authorities, in their capacity as insolvency creditors, when it comes to the successful recovery of a VAT claim (debts incumbent in the estate) or the loss of a claim (insolvency claim). The legislator has now amended sec. 55 para 4 of the German Insolvency Statute, effective as from 01.01.2021, and extended it to cases of preliminary debtor-in-possession-management. In its letter of 11.01.2022, the Federal Ministry of Finance has now commented on some controversial questions concerning the amended section.
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06
2022
In a letter dated 7 February 2022, the German Federal Ministry of Finance comments, for the first time, on the VAT treatment of the increasingly popular use of electric vehicles and company bicycles. Fortunately, from now on, and for the past, the 1% regulation can also be applied to (electric) bicycles. However, the German Federal Ministry of Finance also clarifies that the various income tax benefits in this area do not apply to VAT. This means high administrative burdens for all entrepreneurs, who must determine different tax bases for income tax (especially wage tax) and VAT.
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05
2022
According to Union law, the right to deduct input VAT arises when the deductible VAT becomes chargeable. In its recent ruling, the ECJ confirms this rule also for the case that the VAT becomes chargeable only upon receipt of payment due to the supplier calculating its VAT on the basis of the remuneration received (cash accounting scheme). The recipient can then deduct the input VAT only at the time of payment. This applies to all recipients, irrespective of how they calculate their VAT. In this respect, the German law and the current view of the tax authorities are contrary to Union law.
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04
2022
The demarcation between compensation for damages and consideration for supplies rendered, has been an ongoing issue in daily practice. According to sec. 1.3 para. 3 of the German VAT Circular, contractual penalties, inter alia, are deemed to be compensation for damages rather than consideration for supplies. The ECJ is now narrowing this view. In its judgment of 20 January 2022, (C-90/20 – Apcoa Parking Danmark A/S), it ruled on a case concerning the use of a private sector parking space. If a motorist violates the general conditions of use when using a parking space and, as a result, is required to pay an (additional) amount of money, the ECJ considers this to constitute consideration for a supply of service, subject to VAT, for the specific use of the parking space.
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