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Not every grant is subject to VAT. And not every genuine grant reduces the input VAT deduction. The Federal Fiscal Court ruling of 17 April 2024 (XI R 13/21) marks a milestone in this regard. In addition, the Federal Fiscal Court sends a clear message that state grants to local public transport are not subject to VAT. Pleasing news for the entire German public transport sector.
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The ECJ has, once again, dealt with the VAT exemption for the management of special investment funds. It ruled that funds (the case in question concerned pension funds) can, in principle, only be managed exempt from VAT if the investor bears a risk similar to that of an investor in a securities fund. However, it is also sufficient if the fund in question is comparable with other funds whose management a Member State regards as VAT exempt. The decision could have an impact on the discussion as to whether the current sec. 4 no. 8 lit. h of the German VAT Act is in conformity with Union law.
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The tax authorities extensively assume barter transaction in cases of valuable waste. The German Federal Fiscal Court now ruled that waste disposal that leads to the creation of valuable materials does not necessarily constitute a barter transaction. This especially applies if the waste provided is not a marketable commodity, but instead requires complex reprocessing in order to obtain saleable materials. It remains to be seen whether the tax authorities will adopt the Federal Fiscal Court’s differentiated view.
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