The German Federal Tax Court (BFH) has asked the Court of Justice of the European Union (CJEU) to clarify whether value added tax (VAT) may be charged on EU subsidies.
Specifically, the two referral orders (September 2018) pertain to financial assistance within the scope of the common organization of the market in fruit and vegetables.
The submission to the CJEU also concerns the minimum basis for the VAT calculation for discounted payments made, for example, by corporations to their trading partners. In particular, the CJEU is asked to clarify whether the minimum basis rule applies even though the recipient is entitled to the full input tax deduction in situations involving a discounted supply of capital items that are subject to input tax deduction corrections. Until now, the BFH has agreed to this position. It remains for the CJEU to issue a judgment on this issue.
Other recent VAT developments that may affect businesses in Germany include the following items:
Read an October 2018 report [PDF 318 KB] prepared by the KPMG member firm in Germany
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