Germany: VAT measures included in Tax Amendment Act of 2025; other VAT developments

Recent VAT developments that may affect businesses in Germany

The lower house of Parliament (Bundestag) is expected to consider the government draft of the Tax Amendment Act 2025 in the 2nd/3rd reading on December 5, 2025, and if passed, the legislation will be considered by the upper house of Parliament (Bundesrat) on December 19, 2025.

The legislation includes the following value added tax (VAT) measures effective January 1, 2026, which were contained in the immediate action program for Germany adopted by the coalition committee on May 28, 2025:

Reduction of VAT for restaurant and catering services, with the exception of the supply of beverages, to 7% (Section 12 (2) no. 15 UStG-E)
Notification of an assessment notice by making it available for data retrieval (Section 18g sentence 5 UStG-E)
Special regulation for the use of central customs clearance (CCI) (Section 21b (new) UStG-E)

Read an August/September 2025 report prepared by the KPMG member firm in Germany

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

VAT for transfer pricing adjustments (CJEU judgment of September 4, 2025, C-726/23)
Right to deduct input tax (CJEU judgment of February 14, 2025, C-270/24)
Tax exemption for exports (CJEU judgment of August 1, 2025, C-602/24)
Incorrectly declared VAT (CJEU judgment of August 1, 2025, C-794/23)
Uniform service (hotel/breakfast, parking, fitness and wellness facilities, WLAN) (CJEU Advocate General opinion of September 25, 2025, C-409 to 411/24)
Service relationships in VAT (BFH ruling from July 29, 2025, XI B 73/24)
VAT treatment of trading with "non-fungible tokens (NFT)" (Lower Saxony Tax Court judgment of July 10, 2025, Ref. 5 K 26/24)
Treatment of voluntary payments for free offers on the internet (Berlin-Brandenburg Tax Court judgment of April 25, 2025, 2 K 2085/21)
Tax-free brokerage services in the case of covert action by an online broker (Munich Tax Court judgment of July 2, 2025)
Assumption of VAT on rent and ancillary costs in commercial tenancies (Federal Court of Justice (BGH) judgment of January 15, 2025, XII ZR 29/24)

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Germany: VAT measures included in Tax Amendment Act of 2025; other VAT developments

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