Germany: Input tax deduction in absence of tax statement; other VAT developments
Recent VAT developments that may affect businesses in Germany
The Federal Fiscal Court (BFH) in June 2025 held that an input tax refund (Section 18 (9) UStG) was not possible for 2019 due to a lack of reciprocity with the plaintiff's country of residence. In this respect, the processing of an advance sales tax return was rejected. The invoice correction had no retroactive effect, as the plaintiff had not been invoiced for sales tax by the supplier nor had it paid any sales tax to the supplier, because both parties had agreed on the application of a sales tax warehouse regulation. It was not until January 2019 that an invoice with sales tax was issued. This meant that the plaintiff was only then entitled to exercise its right to deduct input tax.
Read a November 2025 report prepared by the KPMG member firm in Germany
Other recent value added tax (VAT) developments that may affect businesses in Germany include:
- Tax exemption for intra-community supplies (CJEU judgment of November 13, 2025, C-639/24)
- Submissions on the significance of VAT identification numbers and triangular transactions (Preliminary ruling request to the CJEU dated September 18, 2025, BFG RE/2100001/2025)
- Free initial access to an e-subscription to a newspaper in the years 2009 to 2012 (BFH, judgment of July 9, 2025 – XI R 29/23)
- VAT exemption for services directly serving school and educational purposes (BMF, letter dated October 24, 2025 – III C3 – S 7179/00054/001/094)
- Application of VAT exemption pursuant to Section 4 No. 22 letter a UStG (BMF, letter dated October 24, 2025 - III C 3 - S 7180/00032/001/065)
- Input tax deduction from a service purchase before the entrepreneur's transition to standard taxation or the small business regulation (BMF, letter dated November 10, 2025 - III C 2 - S 7300/00080/004/019)