In a recently published judgment, the German Federal Fiscal Court (BFH) deals with the 2006 VAT exemption for private hospitals. In referring the case back to the Fiscal Court, the BFH provides some guidance on how the VAT exemption should be examined, specifically in terms of the 40% quota. The Federal Ministry of Finance considered this quota to be a prerequisite for the VAT exemption dating from the year 2009. The legislator then incorporated it into the German VAT Act. As a result, the judgment is also of interest for more recent filing periods. It can provide support regarding the justification for VAT exemption of supplies rendered by private hospitals.

New acts regularly lead to questions of application. This is also the case with the Platforms Tax Transparency Act, which has been in force since 01.01.2023 and stipulates comprehensive reporting obligations for digital platforms. Even though the Ministry of Finance answered many application questions in its circular of 02.02.2023, some practical questions still remain open.

In its letter of 14 December 2022, the German Federal Ministry of Finance (BMF) responds to the recent jurisprudence of both the German Federal Fiscal Court (BFH) and the ECJ on the incurrence of VAT in the case of partial supplies and instalment payments. The BMF follows the BFH’s decision. Thus, even in the case of agreed instalment payments, VAT is already chargeable, in full, at the time the supply is rendered. Taxable persons seeking to control the incurrence of VAT will have to think about alternative structuring.