On-demand work: risk of phantom wages In many companies there is great uncertainty when employees are deployed on call (on-demand work). This often affects mini-jobbers or flexibly employed part-time employees subject to social security contributions, who often work without a written employment contract. On-demand work is particularly the case if the scope of the work to be performed is not […]
Reduced German VAT: updated draft letter by Federal Ministry of Finance In our blog article dated June 16, 2020, we discussed the first draft of a letter issued by the Federal Ministry of Finance (BMF) with information on the practical implementation of the temporary reduction in VAT. On June 23, 2020, BMF published an updated draft of the aforementioned letter. […]
Temporary reduction of German VAT: initial guidance by the Ministry of Finance on its practical implementation Companies face major tax and administrative challenges from the temporary reduction in German VAT. The German Federal Ministry of Finance (BMF) published an 18-pages draft on June 15, 2020 with information on the practical implementation of the temporary reduction in VAT (BMF Letter). Notes: […]
Temporary reduction of German VAT: how to deal with continuous services The German Federal Government agreed on June 3, 2020, to stimulate the German economy by reducing VAT rates from 19% to 16% (standard rate) and from 7% to 5% (reduced rate) in the period from July 1 to December 31, 2020 (see also our blog article). Rentals, leasing (cars, machines, etc.) […]
Economic stimulus package of the German Government: Measures at a glance The German Federal Government agreed yesterday, June 3, 2020, on measures to stimulate the German economy as a response to the implications of the Coronavirus-epidemic. The measures have still to pass through legislative procedures. In the following, a selection of planned tax-related measures is summarized. Reduction of value added tax: […]
VAT liability for cross-border transportation services: Ministry of Finance has extended the deadline In our blog article “VAT liability for cross-border transportation services: Important changes for forwarding agents“, we reported that for transportation services revenues carried out before 1 July 2020, the tax authority will not object if the previous principle was applied. The Federal Ministry of Finance has extended this […]
Mandatory reporting on cross-border tax planning Background An EU-directive on mandatory disclosure rules (Council Directive on administrative cooperation in the field of taxation, so called “DAC6”) aimed at increasing transparency to detect potentially aggressive cross-border tax planning became effective in June 2018. DAC6 applies to cross-border tax arrangements, which meet one or more specified characteristics (hallmarks), and which concern either […]
VAT liability for cross-border transportation services: Important changes for forwarding agents Cross-border forwarding services (transportation of goods) in connection with third (non-EU) countries are under certain circumstances VAT-free (§4 Nr. 3a German VAT Code). Based on the decision of the European Court of Justice dated 29 June 2017, the German Federal Ministry of Finance has issued a letter on 6 […]
