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VAT News 06/2014
Federal Fiscal Court refers questions on input VAT deduction of holding companies to ECJ
The Federal Fiscal Court has referred questions on the scope of input VAT deduction by holding companies and several questions regarding VAT groups to the European Court of Justice (ECJ). The decision on the input VAT deduction of holding companies is of particular relevance as the Federal Fiscal Court has taken the position that the input VAT deduction is possible only in a restricted extent. Holding companies should prepare for an approving verdict of the ECJ and take steps to secure the input VAT deduction. The questions on VAT groups will be dealt with in our next newsletter.
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VAT News 05/2014
Separating intra-Community self-supplies from temporary transfers of goods
Many German companies ship products for processing to other EU Member States. After processing and transformation, some finished products are returned to their EU Member State of origin and some are shipped to another EU Member State for further processing. In practice, there is great uncertainty - also due to differing national regulations. The ECJ has now decided that a (non taxable) temporary transfer of goods is only given if the goods will be returned to the country of departure after processing. However, this is only half of the story.
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VAT News 04/2014
Federal Tax Court softens principle of taxation at the time of supply
Entrepreneurs are not obliged to pre-finance VAT over a period of years. The Federal Tax Court expressed its position regarding uncollectibility. Correction of VAT may potentially be taken into account whenever agreements regarding retentions are made on the basis of which entrepreneurs are not fully entitled to the payment of remuneration at the time of the supply is carried out (temporary uncollectibility).
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