A few months ago, the Wage Tax regulations for company events and small gifts were changed. This change impacts on VAT. The Federal Ministry of Finance has now given its opinion on this issue. It is no surprise that the Wage Tax regulations may not be fully applied with respect to VAT. In principle, the regulations for Wage Tax are applicable for the VAT treatment for simplification purposes. However, there are also substantial differences between these two types of taxes. In particular, there is no identical treatment if the costs for a company event exceed the value of 110 € per participant.

In a decision of 18 June 2015, the tax court Niedersachsen (Lower Saxony) expressed its disagreement with the tax authorities‘ opinion regarding consignment stocks (case no. 5 K 335/14). The case concerned supplies from the EU to a call-off stock in Germany. The tax court decided that the respective contractual agreements of the parties are essential for the VAT treatment. It is yet to be determined whether an unconditional purchase agreement had already been put in place prior to the goods being shipped to the warehouse. It is now evident that companies may not rely on the rules for consignment stocks as contained in the German VAT Circular. Both, suppliers and customers need to carefully check what is agreed in terms of their consignment stock contracts.

Taxable persons who wish to carry out a zero-rated intra-Community supply of goods must provide proof thereof. Basically, the proof has to be formal in nature, specifically documentary and accounting evidence. In the Federal Fiscal Court’s view (judgment of 19 March 2015 – V R 14/14) evidence provided by a witness is accepted only in exceptional cases. Above all, this decision will have an impact on legal disputes.