Germany: Proposed legislation includes VAT-related measures, other VAT developments

Recent VAT developments that may affect businesses in Germany

Recent VAT developments that may affect businesses in Germany

The government draft for a Fourth Bureaucracy Reduction Act would introduce the following measures relating to value added tax (VAT):

  • Advance reporting period: Increase in the VAT threshold of the past year for the application of a calendar month as the advance reporting period to €9,000 (from €7,500)
  • Margin taxation in the case of retailers: Increase in the purchase price threshold to €750 (from €500)

A previously proposed reduction in the retention period of accounting documents (including invoices) to eight years (from ten years)—to be uniform in both tax and trade law—remains unchanged.

Read a March 2024 report prepared by the KPMG member firm in Germany

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

  • Legislation introducing electronic invoicing (e-invoicing) mandate approved by Parliament (read TaxNewsFlash)
  • Federal Tax Court (BFH): VAT reduction for the supply of works of art (ruling of 18 October 2023, XI R 15/20) and VAT rate for the supply of stray animals (resolution of 18 October 2023, XI R 4/20)
  • Federal Ministry of Finance (BMF) guidance: Showing incorrect VAT in invoices to final consumers (27 February 2024 – III C 2 - S 7282/19/10001:002)



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