Overnight stays in hotels are treated differently throughout Europe. While European VAT law requires that all services related to overnight stays in hotels be taxed at a uniform rate of 7 percent, Germany continues to deviate: currently, the VAT allocation rule prevails. This means that while German hotels charge the standard 7 percent VAT on overnight stays, they charge the […]
Background The so called One-Stop-Shop procedure (OSS) recently adopted as part of the German Annual Tax Act 2020 will replace the current VAT Mini-One-Stop-Shop (MOSS) procedure as of July 1, 2021. The current MOSS procedure is a special procedure that allows an entrepreneur to centrally pay VAT amounts due in other EU countries. In this way, registration in several member […]
Taking advantage of tax benefits: e-bikes Background Over the last few years, electric bicycles (e-bikes or ebikes) in particular have become increasingly popular alongside classic bicycles. At the beginning of 2015, there were still electric bikes in 1.5 million households. At the beginning of 2020, 4.3 million households in Germany already owned at least one electric bike. This means that […]
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.) […]
Temporary reduction of German VAT in 2020 and its implications on businesses: time to act quickly 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). […]
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 […]
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 […]
