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VAT News 34/2025
ECJ: VAT Trap in Transfer Pricing Adjustments?
In its eagerly awaited judgment in the Arcomet Towercranes case, the ECJ clarifies when compensation payments, aimed at adjusting profit margins to the arm’s length principle, may constitute remuneration for a taxable supply. The Court’s classification could have implications for many businesses. Multinational groups should review how transfer pricing adjustments currently interact with VAT and whether the judgment gives rise to any need for action. The ECJ’s findings on the uncertain nature of the provision of payment and the need for further evidence to support input VAT deduction are also relevant beyond the context of transfer pricing.
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VAT News 33/2025
Digital marketplace not considered a seller of NFTs for VAT purposes
The Lower Saxony Fiscal Court denies a deemed reseller model according to sec. 3 para. 11a of the German VAT Act in the case of NFT sales via a digi-tal marketplace. The Fiscal Court classifies NFT sales as electronically sup-plied services, but does not consider the digital marketplace as being part of a reseller model. The beneficiaries are digital marketplaces, which merely provide intermediary services for VAT purposes despite their technical in-volvement in the sales process.
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VAT News 32/2025
Federal Ministry of Finance letter on online education and other events only results in a half-step backwards
On 8 August 2025, the Federal Ministry of Finance (BMF) updated its long-awaited application letter on online education and other events dated 29 April 2024. The main point of criticism, according to which recordings lead to the entire supply being subject to VAT, has been modified. This is to be welcomed. However, the reversal is only partially successful. All providers must re-evaluate their courses at short notice. Some will even be required to make urgent changes to their practices. Providers of online events are currently subject to a hodgepodge of several Ministry of Finance letters, a new version of sec. 4 no. 21 of the German Value Added Tax Act and the Distance Learning Protection Act.
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