In a letter dated 29 April 2024, the tax authorities issued a comprehensive statement on online events and other online services. According to this, the distinction between pre-produced content and live streaming is not only relevant for the place of supply, but also for the application of the reduced VAT rate, as well as VAT exemptions for educational services and in the cultural and health sectors. Pre-produced educational videos, for example, are no longer exempt from VAT. These far-reaching changes will come into force on 1 July 2024. Hence, there is an urgent need for action. The letter also addresses deemed chains of services and combinations of services. It is therefore also extremely relevant in practice for influencers, streamers and anyone who offers a recording, in addition to live streams.

The digital age of VAT could soon be upon us. The EU Commission's proposal for a Directive of 8 December 2022 had envisaged comprehensive changes for the platform economy, reporting obligations and electronic invoicing as well as a single EU VAT registration. However, this was criticised and objected to by some of the Member States. A compromise proposal is now on the table, which the ECOFIN Council is going to discuss at its meeting on 14 May 2024. According to reports, a political agreement on the proposal is within reach. If this is not achieved immediately, the meeting on 21 June 2024 would be the next opportunity. As soon as the EU Council has reached an agreement, we will inform you, in detail, concerning the upcoming changes. In this newsletter, we would like to give you a brief overview of the currently suggested new timetable and compromise proposals.

Sales mark-ups for group insurance policies may be subject to Insurance Premium Tax (IPT), but do not have to be. In a recently published judgement, the Fiscal Court Köln commented on the issue of IPT on sales mark-ups and opposed the tax authorities view. The IPT for sales mark-ups was rejected. Now it is up to the Federal Fiscal Court. After its last ruling from 2016 concerning sales mark-ups, the Federal Fiscal Court will now have the opportunity to provide more clarity for taxpayers.