In cross-border situations, it is often the case that you only have limited information about your business partners. Nevertheless, as a supplier, you must ensure that the VAT treatment of the supplies is correct. You must therefore trust that the information provided is correct. Obtaining the correct information from the customer is, in practice, not always easy. The current Federal Fiscal Court ruling of 31 January 2024 - V 20/21 deals with the question of what to do in such a case.

Sales mark-ups for group insurance policies may be subject to Insurance Premium Tax (IPT), but do not have to be. In a recently published judgement, the Fiscal Court Köln commented on the issue of IPT on sales mark-ups and opposed the tax authorities view. The IPT for sales mark-ups was rejected. Now it is up to the Federal Fiscal Court. After its last ruling from 2016 concerning sales mark-ups, the Federal Fiscal Court will now have the opportunity to provide more clarity for taxpayers.

The digital age of VAT could soon be upon us. The EU Commission's proposal for a Directive of 8 December 2022 had envisaged comprehensive changes for the platform economy, reporting obligations and electronic invoicing as well as a single EU VAT registration. However, this was criticised and objected to by some of the Member States. A compromise proposal is now on the table, which the ECOFIN Council is going to discuss at its meeting on 14 May 2024. According to reports, a political agreement on the proposal is within reach. If this is not achieved immediately, the meeting on 21 June 2024 would be the next opportunity. As soon as the EU Council has reached an agreement, we will inform you, in detail, concerning the upcoming changes. In this newsletter, we would like to give you a brief overview of the currently suggested new timetable and compromise proposals.

In a letter dated 29 April 2024, the tax authorities issued a comprehensive statement on online events and other online services. According to this, the distinction between pre-produced content and live streaming is not only relevant for the place of supply, but also for the application of the reduced VAT rate, as well as VAT exemptions for educational services and in the cultural and health sectors. Pre-produced educational videos, for example, are no longer exempt from VAT. These far-reaching changes will come into force on 1 July 2024. Hence, there is an urgent need for action. The letter also addresses deemed chains of services and combinations of services. It is therefore also extremely relevant in practice for influencers, streamers and anyone who offers a recording, in addition to live streams.

In its recently published decision of 22 November 2023, the Federal Fiscal Court ruled that, contrary to the opinion of the tax authorities, a chain transaction is also deemed to exist in the case of ‘broken’ deliveries. The decision relates to the legal situation up to 2019 but should also be applicable by analogy to the current legal situation. Companies are certainly well advised to continue to comply with the German VAT Act and the German VAT Circular. In the event of a dispute, however, the Federal Fiscal Court's findings may prove very helpful.