Transitional regulation of § 2b Value Added Tax Act is extended - churches should pay attention to this now

The transitional provision of Section 2b of the Turnover Tax Act (UStG), which was scheduled to expire on 1 January 2021, was extended by two additional years until 31 December 2022 within the framework of the (first) Corona Tax Assistance Act (Section 27 (22a) UStG-neu).

Pursuant to § 27 para. 22a UStG-neu, an already submitted, unrevoked option declaration continues to apply to all transactions carried out after 31 January 2020 and before 1 January 2023, without any need for action on the part of the corporation. As before, however, the option declaration can be revoked with effect from the beginning of the following calendar year. This means that in the case of the intended application of the new regulation of § 2b UStG, the requirement of a revocation of the previous exercise of the option for the application of the "old regulation" (§ 2 para. 3 UStG old version) already exists for an earlier period - from 2021 or 2022. If, on the other hand, the application of the "old regulation" is to remain, nothing further is required.

Irrespective of this, the new regulation of § 2b UStG still raises considerable questions and uncertainties regarding the future tax treatment of facts. In this respect, the legislator has also justified the extension of the option period with implementation difficulties and a significant aggravation of the situation due to the current Covid 19 pandemic. In addition, the work on implementing the new regulation had come to a standstill in large parts due to the acute crisis.

Security in questions of the application of § 2b UStG to precisely defined, not yet realised circumstances can be obtained in this respect via a so-called binding information of the tax authorities according to § 89 para. 2 of the German Fiscal Code (AO).

The tax authorities have now announced that, under certain conditions, binding information can also be provided on already existing facts. This is particularly the case if, due to the introduction of § 2b UStG, a permanent situation is only to be continued unchanged if no significant negative tax consequences occur. In this case, it must be conclusively demonstrated that a change of circumstances would be possible for the future.

By issuing such binding information, the tax authorities bindingly determine how the specifically requested facts are to be treated in future under § 2b UStG. The application for binding information is therefore an excellent means of obtaining tax certainty.