On 16 October 2015, the federate states agreed to the Tax Amendment Act 2015. Accordingly, there are various changes to the German VAT Act: the reverse charge on the supply of construction work on installed operating equipment is affected as well as the supply of products made of iron or steel, public sector taxation and chargeable events in respect of VAT charged incorrectly. With effect as of 1 January 2016, the intrastat threshold will be increased as well.

If a taxable person’s invoice shows an amount of VAT that is too high, he is liable for the payment of the inflated amount in accordance with sec 14c para 1 sentence 1 of the German VAT Act. If the taxable person wants to eliminate the tax liability, according to sec 14c para 1 sentence 2 of the German VAT Act, he must correct the invoice. The Federal Ministry of Finance has now tightened the requirements for eliminating such VAT liability: It now additionally requires the supplier to repay the already collected additional VAT amount to the recipient.

The ECJ softens the right to deduct VAT in the case Sveda. Taxable persons may now even deduct VAT in the case of the free use of capital goods. The judgment also comments on the question of whether and how taxable persons are entitled to deduct VAT in the case of grants. It is not only non-profit organizations that will benefit from this case law. The decision may also have an impact on the input VAT deduction of holding companies.