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Umsatzsteuer Newsletter 22/2018
Federal Ministry of Finance withdraws French Fries Decree (Pommes-Erlass)
In its letter of 23.04.2018, the Federal Ministry of Finance withdrew the so called “French Fries Decree”. Until very recently, a supplier established somewhere in the Community territory outside Germany could, under certain circumstances, invoice its German customers with German VAT, even where the recipient of the goods was already known at the beginning of the transport in the country of departure. The Federal Ministry of Finance has cited the avoidance of the risk of tax losses as the reason for the change, which applies to all open cases. The Federal Ministry of Finance has granted German customers a transitional period until 31.12.2018 for deducting input tax.
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Umsatzsteuer Newsletter 21/2018
Input VAT deduction even if a reference to other invoice documents is missing
In its legally binding judgement of 16.03.2018 (1 K 338/16 U), the tax court Düsseldorf granted input VAT deduction from an incomplete invoice. The incomplete invoice did not explicitly refer to any other invoice documents, which contained the missing information. Nevertheless, the tax court Düsseldorf granted the input VAT deduction anyway. This is because a specific and unambiguous reference to other accounting documents relating to the incomplete invoice was derived from the factual connection. It is not required that an incomplete invoice explicitly refers to other invoice documents.
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Umsatzsteuer Newsletter 20/2018
Interest on taxes unconstitutional?!
The 9th Senate of the Federal Fiscal Court has voiced “serious doubts” as regards the constitutionality of the interest rate on tax arrears. The rate is 0.5% per month (i.e. 6% per year). The court considers the interest rate to be “unrealistic” and that it violates the general principle of equal treatment pursuant to Art 3 para 1 of the German Constitution. Furthermore, the court regards the interest rate as excessive, thereby infringing Art. 20 para 3 of the German Constitution. As a consequence, taxpayers should appeal against interest assessments on tax arrears and apply for a stay of execution.
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