Germany: No input VAT deductions for import VAT on goods never received (Federal Tax Court decision)
Recent VAT developments that may affect businesses in Germany
Recent VAT developments that may affect businesses in Germany
The German Federal Tax Court (BFH) held (V R 13/21) that the taxpayer was not entitled to input value added tax (VAT) deductions for import VAT paid with respect to goods that the taxpayer never actually received.
The BFH found that in order to deduct input VAT on imported items, the imported items be used for the purposes of the taxpayer’s taxed transactions. Otherwise, the taxpayer is merely performing a customs clearance or transport service, which does not entitle it to deduct input VAT.
Read an October 2023 report [PDF 516 KB] prepared by the KPMG member firm in Germany
Other recent VAT developments that may affect businesses in Germany include the following items:
- Subscription bonus can be an ancillary service (CJEU, ruling of 5 October 2023, C-505/22) (read TaxNewsFlash)
- VAT rate of drinks (CJEU, ruling of 5 October 2023, case C-146/22) (read TaxNewsFlash)
- Consequences of the annulment of national legislation (CJEU, ruling of 5 October 2023, case C-355/22)
- Legitimate expectation in the case of illegal administrative actions (BFH, ruling of 6 July 2023, V R 5/21)
- Planned electronic invoicing (e-invoicing) (BMF, guidance of 2 October 2023, III C 2 – S 7200/19/10006 :001)
- Reduced VAT rate in the case of supplies of woodchips (BMF, guidance of 29 September 2023, III C 2 – S 7221/19/10002 :004)
- Reduced VAT rate in the case of short-term rental of living space and rooms (BMF, guidance of 6 October 2023, III C 2 - S 7245/19/10001:004)
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