Germany’s Federal Tax Court (BFH) has referred to the CJEU a case concerning whether the requirements and legal consequences of value added tax (VAT) groups in Germany are compatible with EU law.
The case identifying information is: XI R 16/18 (11 December 2019).
In terms of the domestic VAT law in Germany, the BFH’s view is that for the justification of a VAT group, it continues to be necessary that a superior and subordinate relationship exists between the controlling enterprise and the subordinate company as a “subordinated entity” (that there is integration with rights of intervention in line with the BFH decision of 2 December 2015, V R 15/14).
However, from an EU law point of view, the parties have disputed whether this VAT grouping rule must be adhered to. In this regard, the BFH has posed four questions to the CJEU for clarification:
Read an April 2020 report [PDF 305 KB] prepared by the KPMG member firm in Germany
The KPMG report also includes brief discussions about other VAT developments that may affect businesses in Germany:
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