The principle of neutrality in VAT law requires that VAT exemptions may not be denied if the substantive conditions are met. This also applies if not all formal requirements are met. The ECJ clearly confirmed this using the example of export supplies of goods.

The German Federal Fiscal Court reached its decision – in a case that highlights several practical issues regarding the distinction between single-purpose vouchers (SPV) and multi-purpose vouchers (MPV), which has applied since 1 January 2019. The central question is: Which circumstances must be taken into account when determining whether the place of supply and the VAT due for the supply underlying the voucher are already known at the time of issue? While the German Federal Fiscal Court provides guidance on certain aspects, other key questions remain unanswered.

Shortly before its dissolution, the XIth Senate of the German Federal Fiscal Court (BFH) left taxpayers with a parting gift: in a landmark judgment on input VAT deduction, it paved the way for the transition from the special refund procedure for non-established businesses to the general assessment procedure. In doing so, the BFH not only further developed the principles distinguishing between the arising and the exercise of the right to deduct input VAT, but also reinforced the practical implementation of the VAT neutrality principle – a highly welcome development. As a result, both the substantive and formal restrictions of the refund procedure can, in certain cases, be circumvented.