Just like the European Court of Justice (judgment of 07 March 2013, legal case C-275/11 – GfBk), the Federal Fiscal Court acknowledges, in its latest decision of 11 April 2013, V R 51/10, that advisory services regarding investment recommendations for investment management companies are VAT exempt. Consultants, who charge fees for advising investment management companies regarding the purchase and sale of securities for the investment management company's special investment, benefit from these judgments.
A limited company is not permitted to deduct VAT regarding the expenses incurred with respect to the criminal defence of its CEO even if the criminal charges are connected to his operating activities (Federal Fiscal Court, judgment of 11 April 2013, V R 29/10). The same applies for individual entrepreneurs. It only does not affect VAT deduction if proceedings are also taken against the company.
On 21 June 2013, the EU-Council decided to amend Implementing Regulation (EU) No. 282/2011. Most of the changes are related to the rules regarding the place of supply for telecommunication, broadcasting and electronic services that will be amended with effect as of 1 January 2015. In addition, changes regarding services connected with immovable property have been implemented. Companies should acquaint themselves, at an early stage, with these interpretation rules. The Implementing Regulation (EU) is directly applicable without any further implementation act.
Finally, the so called Amtshilferichtlinien-Umsetzungsgesetz (AmtshilfeRLUmsG) was published on 29 June 2013 in the Federal Law Gazette. Most of the changes, among them changes to VAT law, will be effective the day after the Act has been published. Once more, taxable persons must react quickly and amend their invoice templates. Customers should carefully review incoming invoices, in order to ascertain that they are in line with the new invoicing rules in order to ensure input VAT deductions.
Regarding intra-Community supplies the German law allows certain alternative means of proof besides the entry certificate. These alternative means of proof are in the scope of the second part of our newsletter regarding the required proof for intra-Community supplies.
It is final: The obligation to provide proof for zero-rated intra-Community supplies changes with effect from 01 October 2013. Although the revision strongly adheres to the concept of the entry certificate, there is some relief in two respects: Firstly, the strictness of the requirements of the confirmation of arrival has been eased and secondly, it is no longer mandatory to provide this proof by means of a so-called entry certificate. Every company that carries out intra-Community supplies needs to adapt to this revision as quickly as possible. The departments directly affected by this are the accounting, logistics, shipping, legal, tax and IT departments.
After the extensive changes which occured at the beginning of 2013, there are not too many new midyear regulations in the EU member states to report. Nevertheless, VAT rates, as usual, remain rather volatile. Furthermore, the fight against VAT fraud is increasingly gaining a higher profile. The EU Council has agreed to two proposals for new directives which allow member states to implement measures against VAT fraud temporarily and on short notice.
Last year the German Ministry of Finance changed its view on the VAT treatment of sales of tickets by intermediaries. Now, the German VAT Circular has been amended accordingly. All entrepreneurs selling tickets as intermediaries but not as organizers of events will need to review their invoicing processes. This not only concerns typical ticket sellers but potentially event organizers and all other entrepreneurs selling tickets to other parties.
Due to the accession to the EU, entrepreneurs having business relations with Croatia will need to make changes to the individual settings in their SAP systems. From now on, business transactions will have to be treated differently in VAT matters. These changes will have to be implemented accordingly with regard to the customer’s settings, using the correct tax codes and the invoice layouts as well as VAT reports, EC-Sales lists and Intrastat declarations.
In its latest judgment, the European Court of Justice (ECJ) comments on the legal case Petroma Transports and others regarding the question of VAT deduction following an invoice correction. According to the ECJ’s statements, invoice corrections have to be transmitted to the responsible tax office before decisions on denying VAT deduction are being made. It could be interpreted that VAT deduction with retroactive effect should be pos-sible. Therefore, entrepreneurs are forced to take action by having invoices corrected properly and quickly as well as transmitting the corrected invoices to the tax authorities in time.