In Germany, e-invoicing will be obligatory for domestic B2B supplies between established companies from 1 January 2025. Yesterday, around two and a half months before the introduction of the e-invoicing obligation, a corresponding Finance Ministry Circular was published. The Circular contains clarifications which were not included in the draft circular published in June 2024.

The supply of electricity by a landlord can, under certain conditions, constitute an independent taxable supply. The supplier of tenant electricity is then entitled to full input VAT deduction from the purchases that are directly and immediately related to the taxable supply of electricity. In its decision published on 26 September 2024, the Federal Fiscal Court clarifies the specific conditions required for a taxable supply to be deemed to be independent and explicitly deviates from the view of the tax authorities (sec. 4.12.1 para. 5 sentence 3 of the German Administrative VAT Guidelines).

Not every grant is subject to VAT. And not every genuine grant reduces the input VAT deduction. The Federal Fiscal Court ruling of 17 April 2024 (XI R 13/21) marks a milestone in this regard. In addition, the Federal Fiscal Court sends a clear message that state grants to local public transport are not subject to VAT. Pleasing news for the entire German public transport sector.