The Federal Council has approved the Growth Opportunities Act. This means that mandatory e-invoicing for national B2B transactions will be introduced in Germany on 1 January 2025. Transitional provisions are only available for invoice issuers. Taxable persons established in Germany must be able to receive e-invoices from 2025.

With its judgement of 7 December 2023 – V R 14/21 the German Federal Fiscal Court (BFH) ruled that the input VAT arising from installation costs for a heating system for residential rentals is not deductible. The BFH did not comment on the question as to whether the energy supply provided by the landlord should be classified as a mere ancillary supply to the rental or as a separate supply. This question was not relevant in this case because the input VAT deduction for the installation costs of a heating system for residential rentals was ruled out. The German rental laws do not allow for these costs to be allocated to the operating costs for which the VAT exemption may be waived.

In its letter dated 13 February 2024, the Federal Ministry of Finance (BMF) comments on the topic of input VAT apportionment in the case of mixed use of procured supplies. This topic is of crucial practical relevance and, at the same time, is often the subject of controversial discussions, especially in the course of VAT audits carried out by the tax authorities. In particular, the letter comments on the relationship between a total turnover-based allocation key and other apportionment methods. The BMF also explains how the total turnover-based allocation key is to be calculated. Essentially, these are clarifications, rather than groundbreaking innovations.