Germany: Ordinance on assignment of tax-related business numbers

An ordinance on the assignment of tax-related business numbers (W-IdNr) was published in the Federal Law Gazette 2024 I, No. 293 on October 2, 2024, and therefore became effective (with the exception of Section 3 (4)) on October 3, 2024.

• W-IdNrs will be introduced on October 24, 2024, and will consist of the capital letters "DE" followed by nine digits, corresponding to the structure of the value added tax (VAT) identification number, with the distinguishing feature 00001 at its end. For further economic activities, businesses, and permanent establishments of an economic operator, the distinguishing features will be assigned beginning March 1, 2026.
• The Federal Central Tax Office (BZSt) assigns VAT identification numbers by November 30, 2024, and the VAT identification number will also be a valid W-IdNr. The process of assigning W-IdNrs to those economic operators who have not been allocated a VAT identification number by November 30, 2024, will begin on December 1, 2024.
• The W-IdNr. is a unique identification number that is assigned to all economic operators in Germany in all legal forms. The goal of introducing the W-IdNr is to simplify communication between economic operators and authorities as well as between the authorities themselves.
• Taxpayers (and third parties who transmit data to tax authorities) are obliged to use the W-IdNr for applications, declarations, or notifications to tax authorities (after completion of the initial allocation). For a transitional period, a non-objection rule is planned if the tax number is given instead.
• Detailed regulations on the allocation of the W-IdNr, as well as on the effects of changes to the legal entity representing the economic entity (e.g., transformations, mergers, and contributions) and further organizational details such as transitional regulations will be published in future Ministry of Finance (BMF) letters.

Read an August/September 2024 report prepared by the KPMG member firm in Germany

Other recent value added tax (VAT) developments that may affect businesses in Germany include the following items:

• CJEU
  • Limits of direct VAT claims (September 5, 2024 decision – case C-83/23 – H)
• Federal Tax Court (BFH)
  • Use of margin taxation on “coffee trips” (June 20, 2024 decision – V R 30/23)
  • No retroactive correction of invoices in the absence of a reference to an intra-community triangular transaction (July 17, 2024 decision – XI R 35/22 (XI R 14/20))
  • Input VAT deduction for the supply of tenant electricity (July 17, 2024 decision – XI R 8/21)
• Ministry of Finance (BMF)
  • VAT treatment of supplies of fuel within the context of a fuel card system (August 19, 2024 draft guidance)