globaltaxnews.ey.comSign up for tax alert emailsForwardPrintDownload |
10 May 2018 German Ministry of Finance revises VAT treatment for certain EU transport transactions On 2 May 2018, the German Ministry of Finance published a decree (dated 23 April 2018) according to which a simplification for certain European Union (EU) transactions will be abolished, with a grace period in place until 31 December 2018. In the past, German Value Added Tax (VAT) guidelines allowed transactions in which a company from abroad transported goods to Germany in order to sell them to customers that were already known to be treated as follows: Instead of direct intra-community supplies to the customer, the foreign company was allowed to register for German VAT and to split the transaction into a fictitious intra-community (IC) supply (with an IC acquisition in Germany), followed by a taxable domestic supply of goods. The respective rule, which was originally introduced in 1993 when the Common Market was established, had already been severely restricted some years ago and since then excluded transports by third parties such as mail, courier or similar functions, and also required advance written consent by the tax authorities in both affected Member States. The rule used to be of significant practical importance in the past, although this diminished after the above-mentioned restrictions were introduced. Document ID: 2018-5633 |
