The Federal Tax Court (BFH) on December 11, 2024, held (XI R) that an individual taxpayer conducting a used car business was not entitled to apply margin-scheme taxation, and was subject to standard taxation, because he had not proven the existence of the requirements of Section 25a of the Value Added Tax (VAT) Act and had not taken all reasonable measures to investigate irregularities in relation to his respective business partner.
Read a February 2025 report prepared by the KPMG member firm in Germany
Other recent VAT developments that may affect businesses in Germany include:
- The BFH opined on the VAT assessment basis in the case of criminal confiscation of proceeds of crime (September 25, 2024 decision – XI R 6/23).
- The Federal Ministry of Finance (BMF) issued guidance regarding barter-like transactions in the waste disposal sector (January 15, 2025 letter – III C 2 - S 7119/00004/002/027).
- The Lower Saxony tax court held that if the conditions for both the tax exemption for workshops for the blind under sec. 4 no. 19 letter b UStG and for an intra-Community supply under sec. 4 no. 1 letter b UStG are met, the latter, which would allow for input VAT deduction is available, takes precedence (November 14, 2024 decision – 5 K 17/24).