Supplies via consignment stocks are deemed to be direct supplies to the customer and any interim storage will remain unconsidered if the recipient is already known at the beginning of the transport. This is the decision of the Federal Fiscal Court (V R 31/15) published yesterday. The Court came to the same conclusion as that reached by the lower tax courts in their decisions of the past two years. The Federal Fiscal Court thereby opposes the current undifferentiated opinion of the fiscal authorities. This will be welcome news for some foreign suppliers who will therefore be able to avoid registration in Germany. However, practical difficulties might arise, e.g. the time difference between the beginning of the dispatch and the invoicing or the interaction with commercial law and income tax law. In any case, consignment stock agreements and their handling now need to be checked.

The Act for Modernization of Taxation aims to enhance the exclusive automatic assessment. By implementing a new “qualified free-text field” the taxpayer is given the opportunity of having his VAT return dealt with by an official. This should minimize the risk of fiscal offences. Vice versa, refraining from entering information in this field might also give rise to such a risk. Special care should therefore be taken regarding the proper handling of the free-text field.

Only a few weeks ago, the ECJ published its judgment in the legal case Senatex. Therein, it acknowledged that an invoice may be corrected with retroactive effect for the purpose of input VAT deduction. In its decision of 21 December 2016, the Federal Fiscal Court referred to the Senatex case. It amended its case law and acknowledged that invoice correction, with retroactive effect, is possible at any time prior to the end of a hearing before the tax court.