Germany: VAT changes in tax reform bill and draft law on future financing, other VAT developments

VAT developments that may affect businesses in Germany

VAT developments that may affect businesses in Germany

The lower house of the German Parliament (Bundestag) passed the “Act to strengthen growth opportunities, investment and innovation as well as tax simplification and tax fairness” which contains the following value added tax (VAT) related changes:

  • Mandatory use of electronic invoicing (e-invoicing)
  • VAT on supplies of gas and heat
  • Simplification of certain tax procedures

In addition, the Bundestag and the upper house of the German Parliament (Bundesrat) passed the law on the financing of future-proofing investments which provides for the expansion of the VAT exemption for certain venture capital funds—effective 1 January 2024

Read a November 2023 report [PDF 519 KB] prepared by the KPMG member firm in Germany

Other recent VAT developments that may affect businesses in Germany include the following items:

  • Time of collection in the case of transfers (BFH, ruling of 17 August 2023, V R 12/22)
  • Rental of operating equipment as an ancillary service of a property rental; legitimate expectation in the case of administrative instructions (BFH, ruling of 24 August 2023, V R 49/20 (follow-up judgment to CJEU judgment of 4 May 2023, C-516/21 ̶Y))
  • VAT exemption for laboratory services (BMF, guidance of 10 October 2023, III C 3 - S 7170/20/10002:001)
  • Income tax related permanent establishment (BFH, ruling of 27 June 2023, I R 47/20)
  • VAT treatment of investment subsidies (Saarland Lower Tax Court, ruling of 14 June 2023, 1 K 1264/19)


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