Germany: VAT implications, place of service - KPMG Global
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Germany: VAT implications, place of service involving permanent establishment

VAT liability in Germany

The German federal tax court (BFH) set out the rules for situations when there is a permanent establishment (PE) implications for the place where services are provided for value added tax (VAT) purposes.


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The term “permanent establishment” is equal to the term “fixed establishment” as used in the EU law. A fixed establishment of the supplier therefore requires a sufficient level of stability and a structure that enables the supply of services from the staffing and technical equipment point. A fixed establishment does not necessarily require the trader to have its own staff and technical equipment. However, the trader needs to be authorize with a comparable respective power of disposition. Insofar, a trader may establish a fixed establishment of another trader with that trader’s own staff and technical equipment. At the same time, the trader may be a service provider to the fixed establishment in another respect.

With this background, the BFH denied that an German agent qualifies as permanent establishment of an EU betting operator. The case identifying information is: XI R 21/15 (15 February 2017).


Read a June 2017 report [PDF 272 KB] prepared by the KPMG member firm in Germany

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