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The fiscal authority is to impose VAT on the cross-border provision of a company car at the residence of the final consumer. This means that the German employer now has to pay foreign VAT if employees in Germany, who have their residence in another EU member state, receive a company car which is also for private use.
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The Federal Ministry of Finance’s final circular has been released and provides much needed relief in many aspects. However, the fiscal authority does not accommodate the tax payer in all aspects. The amended “non-objection provision” stands out as being the most potentially important change.
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By judgment of 8 August 2013, the Federal Fiscal Court changed its judicature on the characteristic of organizational links thereby increasing the requirements for a VAT group. Companies should check if they still fulfill the requirements for a VAT group.
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