Instead of the major reform of educational services envisaged in the government draft, in the end, only a small reform has been adopted. Although the certification procedure has been retained, it refers to new content, meaning that all providers urgently need a new certificate. This will be impossible until 1 January 2025. The distinction between educational and professional training, with regard to the existence of a systematic intention to make a profit, has not been implemented. In the commercial education sector, this may lead to unwanted VAT exemption and loss of input VAT deduction. It is also incomprehensible as to why the legislator has failed to resolve the chaos created by the German Federal Ministry of Finance's letter of 29 April 2024 in the online education sector. There is also a short-term need for adjustment here, due to a new place-of-supply-rule.

The Annual Tax Act 2024 was approved by the Federal Council on 22 November 2024. This will result in extensive VAT changes. In this newsletter, we provide you with an overview of the upcoming changes. Over the next few days, successive newsletters will take a more detailed look at individual changes.

In part 4 of our newsletter series on the ‘VAT in the Digital Age’ reform, we deal with the so-called single VAT registration. The concept of a single VAT registration is based on a number of measures that are intended to eliminate the previous need for VAT registrations abroad. To achieve this, the One-Stop-Shop procedure and the rules on the reverse charge mechanism for B2B supplies by non-resident taxable persons in other EU Member States will be gradually extended as of 1 January 2027 and 1 July 2028. However, as is so often the case, the devil is in the detail. Member States are free to exercise options, and certain transactions will continue to require a registration abroad.