Germany: VAT proposals in draft bill for Annual Tax Act 2024; other VAT developments
Recent VAT developments that may affect businesses in Germany
July 2, 2024
The Federal Ministry of Finance (BMF) on June 5, 2024, published the government draft for an Annual Tax Act 2024, which includes VAT-related proposals relating to:
- Definition of a delivery of work (§ 3 UStG)
- Place of supply in the case of virtual supplies (§ 3a UStG)
- VAT exemptions (§ 4 UStG)
- Issuing of invoices (§ 14 UStG)
- Unwarranted showing of VAT on credit notes (§ 14c UStG)
- Input VAT deduction (§ 15 UStG)
- One stop shop procedure
- Small traders
- VAT obligation of legal entities under public law (§ 2b UStG)
- Brexit
Read a June 2024 report prepared by the KPMG member firm in Germany
Other recent VAT developments that may affect businesses in Germany include the following items:
- CJEU
- Concept of a fixed establishment (June 13, 2024 decision – case C-533/22 – Adient)
- Federal Tax Court (BFH)
- Division requirement in the case of the reduced VAT rate for dependent ancillary supplies of accommodation (January 10, 2024 decisions – XI R 11/23, XI R 13/23, XI R 14/23)
- VAT on a dinner show within the time limits of § 12 (2) no. 15 UStG (May 29, 2024 decision – XI B 3/23)
- Ministry of Finance (BMF)
- VAT treatment of grants; importance of the purpose connected with the payments (June 11, 2024 guidance – III C 2 - S 7200/19/10001 :028)
- VAT treatment of public authorities under § 2b UStG; input VAT deduction in the case of legal entities under public law being active in business (June 12, 2024 guidance – III C 2 - S 7300/22/10001 :001)