The EU Commission has published Explanatory Notes on the EU VAT place of supply rules on services connected with immovable property. The publication follows extensive consultations with the EU Member States and business representatives. While the Explanatory Notes partly correspond to current German legal practice, there is also some significant deviation away from the German Federal Fiscal Court’s case law and the opinion of the German tax authorities. Insofar, the Explanatory Notes can provide valuable guidance in court proceedings.

On 25 August 2015 (Ref. 1 K 2519/10), the Hessian tax court expressed its disagreement with the tax authority’s opinion regarding supplies via German call-off stock. The tax court decided that supplies via call-off-stock can be intra-Community supplies if certain conditions are met. In particular, if the customer raised binding orders prior to the beginning of the transport to the consignment stock. According to the tax court, it is irrelevant that the right to dispose of the goods was transferred in Germany. The tax court has appealed the judgment (Az. V R 31/15). Therefore, a decision by the Federal Fiscal Court on the VAT treatment of supplies from the EU, via German consignment stock, is ultimately to be expected.

The ECJ has ruled that legal persons governed by private law may be deemed as being bodies governed by public law. This comes as something of a surprise, as the Federal Fiscal Court has previously held a different view on this matter. The new case law is especially important to so-called “entrusted“ taxable persons. The national regulation sec. 2 para. 3 German VAT Act and sec. 2b German VAT Act must now therefore be interpreted in conformity with the directive.