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In two judgments (Ref: XI R 2/18 and XI R 28/18), the Federal Fiscal Court decided, in a business-friendly manner, on the "customary description" in terms of invoices. To date, the fiscal authorities and fiscal courts have always required that the description must allow for individual identification of the goods or services rendered, especially in the low-price segment. However, invoices often show only a category of what was supplied. The Federal Fiscal Court has now clarified that the customary character of the description is based on the commercial practice of billing. Entrepreneurs can henceforth invoke the commercial custom of the description used and thus secure the input VAT deduction.
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Under what circumstances does the reduced VAT rate apply to workshops for disabled persons and integration companies? With its decision of 23.07.2019 (ref. XI R 2/17), the Federal Fiscal Court demonstrates its intention to allow only a very restrictive application of the reduced VAT rate. It ignores both how these non-profit organizations work and that the pursuit of social purposes is privileged in accordance with Union law.
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The reduced VAT rate of 7% for e-books and comparable electronic products will apply with the publication of the Annual Tax Act 2019 in the Federal Law Gazette, probably before the end of this year. In particular, the provision of books, newspapers and magazines in electronic form will be subject to the sec 12 para 2 no 14 of the German VAT Act. However, subscriptions and memberships could also benefit.
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