The German legislator has recently published a draft law reducing the German VAT rates for the second half of 2020 in order to cope with the consequences of the Covid-19 pandemic. According to the draft law, the standard VAT rate will be reduced from 19% to 16% and the reduced VAT rate from 7% to 5% in the period 1 July to 31 December 2020.
The Federal Ministry of Finance (BMF) has already published a draft decree dated 11 June 2020 on the temporary reduction and (re)increase of VAT rates. To date, it is not yet fully clear when a final version of the decree will be published. In many cases, the draft of the decree resembles in detail the BMF decree of 11 August 2006, which was issued at the time of the last standard VAT rate increase (on 1 January 2007) from 16% to 19%.
The Federal Ministry of Tax announced within the Q&A section re Covid-emergency measures that donations of medical equipment, as well as the free provision of personnel for medical purposes, will be exempt from value added tax from April 3, 2020 until the end of the year for beneficiary organizations. Nothing was published yet.
If you are interested in further details please contact the following person.
In a circular letter dated April 23rd 2018, the German Federal Ministry of Finance (FMOF) repealed the German tax authorities’ previous simplification regulation for the so-called intra-Community movement of own goods in the border area (Section 1a.2(14) of the German VAT Application Decree [Umsatzsteuer-Anwendungserlass, or UStAE]). Read More »
The German Federal Fiscal Court (Bundesfinanzhof – BFH) doubts the constitutionality of supplementary payment interest of 1.5% for interest periods from 2015, and has therefore granted a suspension of execution in a summary procedure.Read More »
The German customs authorities tightened the conditions for Swiss based companies to apply for a payment deferral account. In the past it was possible to apply for such an account without having to found an independent subsidiary in Germany.Read More »
Please find attached a newsflash from our German colleagues regarding the new Decree on VAT grouping and input VAT recover for holdco’s:
The Decree will apply to VAT groups and holdcos from 31 December 2018, but local tax authorities have the authority to allow an earlier application with explicit reference to the Decree for all transactions performed (it is not allowed to single out transactions from the application). Read More »