1 GLOBAL INDIRECT TAX Germany Country VAT/GST Essentials kpmg.com TAX
2 b Germany: Country VAT/GST Essentials
3 Germany: Country VAT/GST Essentials Contents Scope and Rates 2 What supplies are liable to VAT? 2 What is the standard rate of VAT? 2 Are there any reduced rates, zero rates, or exemptions? 2 Registration 4 Who is required to register for German VAT? 4 Are there penalties for not registering or late registration? 4 Are there any simplifications that could avoid the need for an overseas company to register for VAT? 5 VAT Grouping 6 Is VAT grouping possible? 6 Can an overseas company be included in a VAT group? 6 Returns 6 How frequently are VAT returns submitted? 6 Are there any other returns that need to be submitted? 6 VAT Recovery 8 Can I recover VAT if I am not registered? 8 Does your country apply reciprocity rules for reclaims submitted by non-established businesses? 8 Are there any items that you cannot recover VAT on? 9 Invoices 12 What do I have to show on a tax invoice? 12 Can I issue invoices electronically? 14 Is it possible to operate self-billing? 14 Transfers of Business 14 Is there a relief from VAT for the sale of a business as a going concern? 14 Options to Tax 15 Are there any options to tax transactions? 15 Head Office and Branch Transactions 15 How are transactions between head office and branch treated? 15 Bad Debt 16 Am I able to claim relief for bad debts? 16 Anti-Avoidance 16 Is there a general anti-avoidance provision under VAT law? 16 Penalty Regime 17 What is the penalty and interest regime like? 17 International Supplies of Goods and Services 9 How are exports of goods and services treated? 9 How are goods dealt with on importation? 11 How are services which are brought in from abroad treated for VAT purposes? 11 All information reflected in this document was obtained/summarized from KPMG in Germany as of October 2011.
4 2 Germany: Country VAT/GST Essentials Scope and Rates What supplies are liable to VAT? Value-added tax (VAT) is due on any supply of goods or services made in Germany, which are taxable supplies made by taxable persons in the course or furtherance of a business carried on by them. Supply includes all forms of supply. It is not restricted to the provision of goods and services by way of sale but can apply equally to other forms of transaction. Supply does not include anything done other than for a consideration. However, certain actions carried out for no consideration are deemed to be supplies; for example, the giving of business gifts, European Union (EU) dispatches within the same legal entity (such as a corporation), and the private use of business assets. Certain transactions are not subject to German VAT; for example, cash payments, the assumption of a debt as a form of payment, and genuine compensation payments. What is the standard rate of VAT? The standard rate of VAT is 19 percent. Are there any reduced rates, zero rates, or exemptions? Yes. There is a reduced rate of 7 percent for certain goods and services, including, for example: food, plants, and animals books and newspapers works of art and collector s items entrance fees to cultural sites supplies of films for exploitation and presentation, if the films are listed under the Youth Protection Act, or were first shown in public before 1 January 1970 supplies made by corporate bodies with exclusively charitable, public, or ecclesiastical aims passenger transport for journeys of not more than 50 kilometers a reduced rate applies for renting out of living and bedrooms which a business maintains for the purpose of short-term accommodation of guests, as well as for short-term letting of camping sites. However, the reduced tax rate does not extend to related services which are not themselves rental services, even if such services are included in the consideration for the rental (in particular the provision of breakfast and parking spaces).
5 Germany: Country VAT/GST Essentials 3 There are two special rates under the farmer s flat rate scheme. A rate of 5.5 percent is applicable to supplies of forestry products which are not the products of saw mills (such as untrimmed timber). A rate of 10.7 percent is applicable to supplies of typical agricultural goods and services, as well as to specific supplies by sawmills. The list of VAT exemptions with input tax recovery (zero-rated supplies) includes, for example: exports supply, import, repair, and maintenance of ships and aircraft under certain conditions the supply and import of gold to central banks cross-border passenger transport by air the supply of goods and other services by the Deutsche Bundesbahn and its subsidiaries at certain locations such as union stations and specific railway lines to rail administrations resident outside Germany financial services provided to private recipients resident outside the EU (note: included in the list although the place of supply will always be abroad in order to point out the input tax recovery). The list of VAT exemptions with no input tax recovery (exempt supplies) includes, for example: as of 1 July 2010: supply of universal postal services (note: the previous VAT exemption was restricted to specific services rendered by Deutsche Post AG) financial services provided to private and business* recipients resident within the EU supplies of official German face-value stamps (the price must not be higher than the face value) supplies falling under the Real Estate Acquisition Law* supplies which are taxed under the Race Betting and Lottery Law insurance letting of land*(limited) health and welfare education. Note: It is possible to elect to opt to tax the above supplies highlighted with asterisk (*), as long as the place of the supply is Germany, and the supplies are provided for the recipient s business. In the case of leasing of land, there are additional restrictions regarding this option. If the place of the supplies is abroad, it would be determined, for the purposes of the right of input VAT deduction, whether the supplier opts to submit himself/herself to taxation according to local VAT Law and whether the same supply if it were made in Germany would have entitled to input VAT deduction as well.
6 4 Germany: Country VAT/GST Essentials Registration Who is required to register for German VAT? German Entities If your business makes taxable supplies in Germany, you will be required to notify the German Tax Authorities of the date of commencement of taxable activities; you will be granted a fiscal registration number (Steuernummer). If your business makes intra-community supplies in Germany, you will be required to notify the German Tax Authorities of the date of commencement of such activities; you will also be granted a VAT identification number (Umsatzsteuer-Identifikationsnummer). Certain entities are not required to submit periodical VAT returns and are not liable for German VAT; for example, non-taxable legal entities and small entrepreneurs. However, if in the preceding year these entities acquired goods in other EU Member States in excess of EUR12,500 (total amount of consideration paid for acquisitions), which were transported to Germany (acquisition threshold), or if it is anticipated that acquisitions during the current year will exceed this amount, the tax authorities must be notified, and VAT returns must be submitted. Non-German Entities The registration rules which apply to German entities also apply to non-german entities providing taxable supplies in Germany. However, the small entrepreneurs exemption does not apply to non-resident taxpayers. Fiscal representation is only possible for foreign taxable persons who provide exempt supplies in Germany, and who do not need to recover German input VAT. If your business is not registered for VAT in Germany, but sells and delivers goods to customers in Germany who are not VAT registered (distance sales), where the value of those sales exceeds a threshold of EUR100,000 in the preceding or in the current year (as of April 2004), your business is required to register and to account for VAT in Germany. Are there penalties for not registering or late registration? There are no penalties for failing to register for VAT in time. However, your business may incur late payment penalties, late filing penalties and interest on any outstanding VAT. No VAT liability and no filing of monthly/quarterly VAT returns is required if the total of supplies made in the previous year did not exceed EUR17,500 and the total of supplies in the current year will presumably not exceed EUR50,000. Total of supplies mainly includes VATable or zero-rated supplies in Germany and no reverse charge transactions.
7 Germany: Country VAT/GST Essentials 5 Are there any simplifications that could avoid the need for an overseas company to register for VAT? If your business makes supplies of goods or services in Germany, you are required to register and account for German VAT. It is, however, possible to avoid registering and accounting for German VAT when making certain supplies. In the following examples, the obligation to account for the VAT due will be shifted to your customer, provided that your customer is registered for German VAT. Triangulation If your business is an intermediate supplier to a German buyer of goods which you purchase from a business in a EU Member State other than your own and which are delivered from there to Germany, VAT due can be accounted for by the German customer (see Invoices section). Call-off stock No simplification procedures officially accepted by German tax authorities apply. Based on the latest of the German Federal Tax Court jurisprudence and depending on the purchase contracts, the application of a simplification procedure should be negotiated with the German Tax authorities on a case-by-case basis. Commission stock Simplification possible. Supply and install: If your business supplies goods and installs or assembles them in Germany, your customer can, in effect, account for any VAT due as a single acquisition of goods (work and material supply Werklieferung). This does not apply if you are required to register for VAT in Germany for other reasons. Reverse charge services: These services are covered in more detail in the International Supplies of Goods and Services section. Please note that the reverse charge also applies if your customer is not yet registered for VAT in Germany. In these cases, your customer will be required to register for VAT in Germany. Bear in mind that these provisions are subject to particular requirements and you should check carefully whether you comply with them. The scope of the reverse charge procedure includes services, work and materials supplies (Werklieferungen) and certain supplies of gas and electricity (since 1 January 2011 extended to cold and heat) of foreign businesses. The scope of the reverse charge procedure also includes supplies within the scope of the Real Estate Transfer Tax Act (Grunderwerbsteuergesetz), as far as the supplier opts for VAT, construction works, and supplies of objects transferred by way of security. Since 1 July 2010 the scope of reverse charge procedure also applies to the transfer of greenhouse gas emission rights according to the Greenhouse Gas Emission Trade Law. Since 1 January 2011 the scope of reverse charge procedure also applies to the supply of certain scrap and waste materials, certain cleaning of buildings or parts of it and supply of certain gold. Since 1 July 2011 the scope of reverse charge procedure is extended to certain transactions in the mobile phone and integrated circuit supply segment.
8 6 Germany: Country VAT/GST Essentials VAT Grouping Is VAT grouping possible? Yes. VAT grouping is obligatory if there are certain financial, economic and organizational links between companies. According to the German VAT Law, partnerships may be considered parent companies, but not subsidiaries. If a company belonging to a German VAT group has financial, economic and organizational ties to the other companies in the group, it does not have the option of leaving the group. Can an overseas company be included in a VAT group? Generally, foreign companies cannot be included in a VAT group. However, where, for example, a foreign parent company has a subsidiary in Germany and a subsidiary in another EU Member State, which in turn has a branch in Germany, VAT grouping between the branch and the subsidiary is required. Returns How frequently are VAT returns submitted? Businesses liable to German VAT are required to submit a VAT return for each calendar year. Most registered businesses are required, in addition, to submit VAT returns on a monthly or quarterly basis (depending on the amount of VAT payable) during the year. Please note that if you start doing business in Germany, monthly returns have to be filed in the first year and second year. Monthly and quarterly VAT returns must be filed electronically, unless doing so would represent an undue hardship. An undue hardship is, in particular, to be presumed in situations where it would be unreasonable to expect the respective business or employer to comply with the technical requirements called for in the Tax Data Transmission Regulations (Steuerdatenübermittlungsverordnung). In such cases, a written request must be submitted to the appropriate local tax office. For the calendar year 2011 and later on VAT returns must be filed electronically as well. Failure to furnish a VAT return on time may result in a latefiling penalty, which is at the discretion of the tax authorities. The late-filing penalty can be up to 10 percent of the net VAT liability due for the VAT return period, but not more than EUR25,000. Failure to make a VAT payment on time may result in a latepayment penalty. The penalty is 1 percent of the outstanding VAT payment, multiplied by the number of months that the payment is overdue. Note: payments made with German checks are deemed to be effected only on the third day following receipt of the check by the tax office. Payment by foreign checks is not recommended.
9 Germany: Country VAT/GST Essentials 7 Are there any other returns that need to be submitted? European Sales List (ESL) If your business supplies goods which are shipped from Germany to VAT registered businesses in other EU Member States, you are required to correctly complete ESL forms (recapitulative statements) electronically. Otherwise, there might be an audit to check the formal requirements for the zero-rated supplies. Further, the intermediate supplier s sales in context of intra-community triangular trade have to be reported in the ESL. It is mandatory for businesses to also state in their ESL those taxable supplies of services executed in other EU Member States for which the recipient of the service, who is established in another Member State, owes VAT in said Member State. This obligation is limited to those cases where the place of supply is determined by the principal rule for B2B services. Since 1 July 2010, intra-community supplies of goods and the intermediate supplier s sales in context of intra-community triangular trade have to be reported on a monthly basis instead of each quarter. Since 1 July 2010, the submission deadline is extended from the 10th to the 25th day after expiration of the reporting period. For the submitting of the ESL, permanent deadline extensions cease to be valid. Special provisions regarding the submission of the ESL apply in case of businesses that are exempt from filing VAT returns. Non-compliance with the obligation to properly file ESLs may result in a penalty of up to EUR5,000. Intrastat Supplementary Declarations VAT registered businesses with a value of dispatches or deliveries to or from other EU Member States, which exceed a certain threshold (EUR400,000 per calendar year since 1 January 2009) must submit supplementary declarations each month. ESL forms can be accessed on the German Federal Central Tax Office s web site. Intrastat forms can be purchased in paper form. Alternatively, the Intrastat declaration can be filed electronically. For supply of services (see above) the ESL must generally be submitted each quarter by the supplier. Insofar as a business is required to submit the ESL for the above-mentioned supplies of goods on a monthly basis, the information on the services has to be reported in the ESL for the last month of the calendar quarter. Alternatively, it is possible to opt for submission of the EC Sales on a monthly basis. Businesses that made the abovementioned supplies of goods in the current and in the four previous quarters and where the tax assessment basis did not exceed EUR50,000 each quarter, may continue to submit the EC Sales List on a quarterly basis. In the transition period from 1 July 2010 until 31 December 2011, the amount of EUR50,000 is replaced by the amount of EUR100,000.
10 8 Germany: Country VAT/GST Essentials VAT Recovery Can I recover VAT if I am not registered? Yes. Provided that your company does not have its domicile, registered office, place of management or permanent establishment in Germany, it may recover German input VAT outside the normal VAT return procedure. Permanent establishment is defined as a fixed establishment. If you are established in another EU Member State, then you should make a 2008/9/EC claim to the German Federal Central Tax Office (Bundeszentralamt fuer Steuern) via an electronic portal set up by the EU Member State where you are established. If you are a non-eu business you should recover the VAT under the 13th Directive (if reciprocity applies). The 13th Directive claim forms may be accessed on the German Federal Central Tax Office s web site. Does your country apply reciprocity rules for reclaims submitted by non-established businesses? For businesses established outside the EU, there are restrictions on the filing of 13th Directive claims in Germany. Generally, reciprocity is required. A list published by the German Federal Ministry of Finance (dated 23 July 2010) lists countries with reciprocity in Table 1 (Annex 1) and countries without reciprocity in Table 2 (Annex 2). Nevertheless, for countries without reciprocity, a 13th Directive claim in Germany is possible in certain situations (such as, as far as the foreign company only makes supplies in Germany where the recipient of the supply is liable to VAT due to reverse charge so that the foreign company is not registered for VAT in Germany). Input VAT deduction for these supplies is possible but not insofar as the VAT applies to the purchase of fuel.
11 Germany: Country VAT/GST Essentials 9 International Supplies of Goods and Services Are there any items that you cannot recover VAT on? Yes. There are certain items that you cannot recover input VAT on. For example: Exempt supplies (without credit): VAT relating to both taxable and exempt supplies must be apportioned. Non-business (including private) activities: Where VAT relates to both business and non-business activities, VAT is recoverable in full in some cases. However, in certain cases, VAT will generally be levied on the private and/or non-business use. Business entertainment: VAT on gifts in excess of EUR35 per recipient to non-employees, per year is not recoverable. VAT on meals is fully recoverable, if expenditures are in reasonable limits. Under German Income Tax Law, there are also some additional non-recoverable business entertainment costs which impact input VAT. Purchases falling within the Tour Operators Margin Scheme (c.f. art. 306 Directive 2006/112/EC): the VAT on goods and services which fall under this scheme cannot be reclaimed. Goods sold under one of the Margin Schemes for Second Hand Goods (c.f. art. 311 Directive 2006/112/EC): there are a number of schemes which provide for VAT to be levied on the goods sales margin, but do not allow VAT recovery on the purchase of those goods. Expenses: VAT can be recovered only if charged to a taxable person in relation to its business. Where invoices and bills are addressed to an employee, the VAT is not deductible. How are exports of goods and services treated? Goods If you sell goods to a customer who is registered for VAT in another EU Member State, and the sale involves the removal of those goods from Germany (either by you or your customer) to that Member State, then you do not need to charge VAT, and may zero-rate the supply as an intra-community shipment. You must obtain your customer s VAT identification number and quote it on your invoice. You should also obtain evidence of the goods removal from Germany. If you sell goods to a customer who is not registered for VAT in another EU Member State, and the sale involves the removal of those goods from Germany by you, you will have to charge German VAT. If your sales exceed a certain threshold applicable in such Member State, or if you waive the application of the threshold, you may have to register in the Member State under what is known as the Distance Selling Scheme. If you export goods to a customer (business or private) outside of the EU, and you arrange for the goods to be transported, you do not need to charge VAT. But, as for intra-community sales, you should make sure that you keep proof of dispatch/delivery in all cases to support your zero-rating. The same applies if the customer arranges for the transport of the goods, provided it is to a non-german customer.
12 10 Germany: Country VAT/GST Essentials Services Rules on the place of supply for services have changed considerably with the implementation of the VAT Package since 1 January The following principal rules apply: As a rule, supplies of services provided to a business for business purposes (so-called B2B services) are made where the recipient of the service is established. As an exception, if such services are provided to a fixed establishment of the recipient, the place of such fixed establishment is the place of supply. These rules apply mutatis mutandis for services provided to non-business legal persons who have been issued a VAT identification number. As a rule, the place of supply of services to customers who do not receive such services for their business (so-called B2C services) is where the business providing the services is established. As an exception, if such services are provided from a fixed establishment of the business providing the service, the place of such fixed establishment is the place of supply. Apart from these principal rules, there are special rules for certain types of services. In particular, these are the following: The place of supply of services connected with land is where the land is located. The place of short-term hiring of a means of transportation (short-term means an uninterrupted period of no more than 30 days), is generally where the means of transportation is in fact made available to the customer. The place of supply of the following services is where the business providing the service physically carries out the service: cultural, artistic, scientific, educational, sporting, entertainment or similar services as well as services in the connection with fairs and exhibitions (in the case of B2C services) generally restaurant and catering services valuations of and work on movable tangible property in the case of B2C services. Admissions to cultural, artistic, scientific, educational, sporting, entertainment or similar events (in the case of B2B services) are taxable at the place where the event takes place. The place of supply of services by an intermediary in the case of B2C services is the place where the underlying transaction is supplied. If the customer is resident outside the EU, the place of supply of certain B2C services is where the customer is resident or domiciled. These include, but are not limited to: use of patents, copyrights, and trademarks advertising legal, tax, technical and management consulting services, financial services use of information and know-how provision of personnel hiring-out of movable property (except for means of transportation) telecommunication services, radio and television broadcasting services electronically supplied services certain services related to natural gas, electricity, heat and cold distribution systems.
13 Germany: Country VAT/GST Essentials 11 Where the supplier is established outside the EU, the place of supply of electronically supplied services (B2C) to customers inside the EU is the place where the customer is resident or domiciled. The same applies in cases where the service provider has a fixed establishment outside the EU from where the services are supplied. There is a number of exceptional cases mainly involving suppliers or customers established outside the EU, where the place of supply is the place where the service is used or enjoyed. The place of supply of passenger transportation is the place where the transportation takes place. Only the distance covered in Germany is subject to German VAT. The same applies to the transportation of goods for B2C purposes, which is not an intra-community transportation of goods. For B2C purposes, the place of supply for tax purposes of the latter is the place of departure. How are goods dealt with on importation? When goods are imported into Germany from outside the EU, import VAT and customs duty may be due. This has to be paid or guaranteed before the goods will be released from customs control. This import VAT and duty can be paid on your behalf by a freight agent or, alternately, you might apply for a VAT and customs duty deferment account. How are services which are brought in from abroad treated for VAT purposes? If you purchase certain services from outside Germany rendered by a foreign entrepreneur (a company which does not have its domicile, registered office, place of management or permanent establishment), you will be required to apply the reverse charge procedure. Permanent establishment is defined as a fixed establishment. The reverse charge procedure is also applicable if the supplier has such fixed establishment in Germany but the supply is not performed from this fixed establishment. Under the reverse charge procedure, you are required to account for a notional amount of VAT as output tax on your VAT return covering the period in which the invoice is issued,
14 12 Germany: Country VAT/GST Essentials Invoices or the month following the period in which you received the supply (where the invoice is issued later), and you recover this VAT as input tax on the same return. Since 1 July 2010 the output tax for services where the place of supply is determined by the principle rule for B2B services arises at the end of VAT return filing period in which the service is performed. In case of advance payments the output tax arises earlier. In case of permanent supplies the tax arises at the end of each calendar year at the latest. If you are able to recover all of your VAT, the reverse charge has no cost effect and is a VAT compliance matter only. However, if you are partly exempt, there is likely to be a VAT cost, depending on the level of recovery allowed using your partial exemption method. The reverse charge applies to a range of services (see the rules on the supply of services above). Under the reverse charge procedure, the liability for VAT is transferred to the recipient of a supply of goods or services. This applies, as a rule, if the recipient of the goods or services is a business; however, it also applies to recipients that are public law legal persons. With effect from 1 July 2010 the scope of the reverse charge procedure is extended to other legal persons. What do I have to show on a tax invoice? you have to issue a tax invoice it should contain the following data ( 14, 14a German VAT Law): complete name and complete address of the supplier complete name and complete address of the customer Supplier s VAT identification number or fiscal registration number (issued by the German tax office and more akin to a UK VAT number). If the supplier chooses to show his/her fiscal registration number on the invoice, it is additionally necessary to print the VAT Identification number on the invoice, where the VAT identification number is required (such as, with intra-eu supplies) date of issue a sequential invoice number: Please note that, for simplification, an invoice already issued can be completed or corrected by issuing a new document which contains the respective amendments only, if this document refers to the invoice number of the original invoice the quantity and nature of the goods/services supplied Since 2007, the reverse charge procedure does not apply in the case of services of foreign businesses or foreign performance companies connected to the access authorization for domestic fairs, exhibitions or congresses. Since 1 January 2011 the reverse charge procedure does not apply in the case of catering services of foreign businesses on board ships, aircrafts or trains.
15 Germany: Country VAT/GST Essentials 13 tax point (date of taxable supply): If the supply was provided, then the invoice has to show the date or month of the supply. If an advance payment is received prior to the date the invoice is issued, then the date of the advance payment must be shown the taxable consideration for each tax rate, and any relevant tax-exemptions unit price (exclusive of any VAT): There is no requirement in Germany to state the unit price. However, it is necessary to state the number of units supplied and the total value. The unit price can be calculated from this information rates of any discounts (if not included in the unit price, and if applicable) existence of a price reduction agreement, if any the applicable VAT rate, as well as the amount of tax allocable to the consideration VAT identification number, name and address of a fiscal representative, if applicable exempt and zero-rated supplies: The reason why VAT is not charged has to be mentioned on the invoice (a reference to the article of the VAT Law or EU Directive is not required) customer VAT identification number (such as on intra- EU supplies: the tax-exempt intra-eu delivery and the VAT identification numbers of both the supplier and the recipient must be shown on the invoice) in case of reverse charge procedure: The shifting of tax liability to the recipient (VAT must not be shown on the invoice) new means of transport/margin schemes (if applicable) in cases of triangulation: The shifting of the tax liability to the recipient and the VAT identification number of both the supplier and the recipient (VAT must not be shown on the invoice). There are fewer requirements to be fulfilled as regards invoices for small amounts (up to a gross, VAT inclusive, amount of EUR150). Please contact the country representative. For certain exempt services (such as, services in the banking or insurance sector) there is no obligation to issue invoices from a VAT point of view.
16 14 Germany: Country VAT/GST Essentials Transfers of Business Can I issue invoices electronically? Yes. Electronic invoices may be issued, provided the authenticity of origin and the intactness of the content can be guaranteed by: a qualified electronic signature, or a qualified electronic signature with supplier accreditation in accordance with the Signature Act; or electronic data transfer (EDI) as in article 2 of the Commission Recommendation 94/820/EC dated 19 October 1994, regarding the legal aspect of the electronic data exchange, if the agreement concerning the data exchange stipulates a system which guarantees the authenticity of origin, and the integrity of the data. From 2009, an additional summarizing invoice, on paper, or with a qualified electronic signature, transferred by electronic means, is no longer required by law. Therefore, compliance with the correct EDI procedure becomes more important. Is there a relief from VAT for the sale of a business as a going concern? Yes. If you sell your business as a going concern, VAT may not be due. However, certain conditions have to be satisfied. For example, the purchaser should be registered for VAT at the time of the transfer (or immediately register as a consequence of the transfer). In case of an asset deal the purchaser has to intend to use the assets to carry on the business, though it is also permissible to make slight changes. However, it is not permissible to buy the business in order to discontinue it immediately. According to the German Federal Tax Court also a disposal of share can be assessed as a transfer of business only if either the stake being sold amounts to 100 percent of the shares, or VAT group status existed between the selling company and the holding company, and the buying company intends to preserve this fiscal relationship post-acquisition. The draft of the 2011 Tax Simplification Act provides, with effect from 1 July 2011 onwards, for both simplified rules on electronic invoicing and an extension of the rights of tax authorities to access data when carrying out a VAT inspection pursuant to Section 27b German VAT Law. However, following the adoption of the 2011 Tax Simplification Act by the German Parliament the Federal Council denied its consent. As German Parliament and Government are entitled to referral to the Conciliation Committee it remains to be seen, whether and on what terms the new rules as originally scheduled for 1 July 2011 or later come into force. Is it possible to operate self-billing? Yes, provided you have the agreement of your customer before doing so.
17 Germany: Country VAT/GST Essentials 15 Options to Tax Are there any options to tax transactions? There is an option to tax certain types of transactions (see Scope and Rates). Head Office and Branch Transactions How are transactions between head office and branch treated? If your head office makes a charge to its branch, or vice versa, it is not treated as a supply for German VAT purposes. Only the deemed intra-community supply of goods is to be reported as a tax exempt intra-community delivery respectively as an intra-community acquisition.
18 16 Germany: Country VAT/GST Essentials Bad Debt Am I able to claim relief for bad debts? If you hold conclusive evidence that your customer will not (fully) pay his/her debt, then you are able to claim VAT back on the unpaid element through your VAT return. If you subsequently receive payment for the supply then you will have to pay back the VAT element to the tax authorities in the same way. Anti-Avoidance Is there a general anti-avoidance provision under VAT law? There is a general anti-avoidance provision under the Tax Procedure Law (AO). Due to ECJ jurisprudence it is in discussion whether and to what extent this provision is applicable to VAT planning schemes that do not reflect the economic logic of a transaction, which therefore appear artificial, and which are not justified by an economic reason or other justifiable logic other than mere tax saving.
19 Germany: Country VAT/GST Essentials 17 Penalty Regime What is the penalty and interest regime like? There are a number of penalties that apply in Germany for compliance failures. Late VAT return filing and late VAT payment penalties have already been addressed above. If your business does not pay an amount of VAT declared on an invoice, this infringement can be punished with a penalty of up to EUR50,000 (careless tax evasion). Professional or criminal evasion of VAT revenues can be punished by a fine or with imprisonment.
20 The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation KPMG International Cooperative ( KPMG International ), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. The KPMG name, logo and cutting through complexity are registered trademarks or trademarks of KPMG International. Designed by Evalueserve. Publication name: Germany Country VAT/GST Essentials Publication number: Publication date: January 2012
GLOBAL INDIRECT TAX Austria Country VAT/GST Essentials kpmg.com TAX b Austria: Country VAT/GST Essentials Austria: Country VAT/GST Essentials Contents Scope and Rates 2 What supplies are liable to VAT?
GLOBAL INDIRECT TAX Denmark Country VAT/GST Essentials kpmg.com TAX b Denmark: Country VAT/GST Essentials Denmark: Country VAT/GST Essentials Contents Scope and Rates 2 What supplies are liable to VAT?
GLOBAL INDIRECT TAX Argentina Country VAT/GST Essentials kpmg.com TAX b Argentina: Country VAT/GST Essentials Argentina: Country VAT/GST Essentials Contents Scope and Rates 2 What supplies are liable to
GLOBAL INDIRECT TAX South Korea Country VAT/GST Essentials kpmg.com TAX b South Korea: Country VAT/GST Essentials South Korea: Country VAT/GST Essentials Contents Scope and Rates 2 What supplies are liable
GLOBAL INDIRECT TAX Netherlands Country VAT/GST Essentials kpmg.com TAX b Netherlands: Country VAT/GST Essentials Netherlands: Country VAT/GST Essentials Contents Scope and Rates 2 What supplies are liable
GLOBAL INDIRECT TAX Thailand Country VAT/GST Essentials kpmg.com TAX b Thailand: Country VAT/GST Essentials Thailand: Country VAT/GST Essentials Contents Scope and Rates 2 What supplies are liable to VAT?
GLOBAL INDIRECT TAX India Country VAT/GST Essentials kpmg.com TAX b India: Country VAT/GST Essentials India: Country VAT/GST Essentials Contents Scope and Rates 2 What supplies are liable to Service Tax?
GLOBAL INDIRECT TAX Chile Country VAT/GST Essentials kpmg.com TAX b Chile: Country VAT/GST Essentials Chile: Country VAT/GST Essentials Contents Scope and Rates 2 What supplies are liable to VAT? 2 What
ZAB SORAINEN Kr. Valdemāra iela 21, LV-1010 Riga, Latvia phone +371 67 365 000 fax +371 67 365 001 firstname.lastname@example.org VAT reg no LV90002573483 Estonia Pärnu mnt 15, 10141 Tallinn phone +372 6 400 900,
GLOBAL INDIRECT TAX Australia Country VAT/GST Essentials kpmg.com TAX b Australia: Country VAT/GST Essentials Australia: Country VAT/GST Essentials Contents Scope and Rates 2 What supplies are liable to
GLOBAL INDIRECT TAX India Country VAT/GST Essentials kpmg.com VAT b India: Country VAT/GST Essentials India: Country VAT/GST Essentials Contents Scope and Rates 2 What supplies are liable to VAT? 2 What
VAT GENERAL INFORMATION FOR BUSINESSES SUPPLIERS OF SERVICES These notes are mainly intended for suppliers of services who are registered under article 10 of the VAT Act. If you are registered as an exempt
Guide on the New Place of Supply of Services Rules Introduction: The new place of supply of services rules in the VAT Act (Chapter 406 of the Laws of Malta) are transposed from Council Directive 2008/8/EC
GLOBAL INDIRECT TAX Sri Lanka Country VAT/GST Essentials kpmg.com TAX b Sri Lanka: Country VAT/GST Essentials Sri Lanka: Country VAT/GST Essentials Contents Scope and Rates 2 What supplies are liable to
GLOBAL INDIRECT TAX United Kingdom Country VAT/GST Essentials kpmg.com TAX b United Kingdom: Country VAT/GST Essentials United Kingdom: Country VAT/GST Essentials Contents Scope and Rates 2 What supplies
Malta: Country VAT Essentials July 2013 Contents The contacts at KPMG in connection with this report are: [Name] [Group] Partner, [Location], [KPMG member firm] Tel: + Fax: + name.surname@kpmg.[...] [Name]
GLOBAL INDIRECT TAX Philippines Country VAT/GST Essentials kpmg.com TAX b Philippines: Country VAT/GST Essentials Philippines: Country VAT/GST Essentials Contents Scope and Rates 2 What supplies are liable
Basic Rules of Issuing Invoices and Receipts 2014 Most requirements pertaining to invoicing are contained in Act CXXVII of 2007 on Value Added Tax (hereinafter: VAT Act) and the decrees issued on the basis
Explanatory notes VAT invoicing rules (Council Directive 2010/45/EU) Why explanatory notes? Explanatory notes aim at providing a better understanding of legislation adopted at EU level and in this case
GLOBAL INDIRECT TAX Singapore Country VAT/GST Essentials kpmg.com TAX b Singapore: Country VAT/GST Essentials Singapore: Country VAT/GST Essentials Contents Scope and Rates 2 What supplies are liable to
HARMONISATION VALUE ADDED TAX IN THE EU Concept of the tax General tax on consumption introduced in 1967 replacing existing systems (cascade system) Applied to supply of goods and services Proportional
GLOBAL INDIRECT TAX Switzerland Country VAT/GST Essentials kpmg.com TAX b Switzerland: Country VAT/GST Essentials Switzerland: Country VAT/GST Essentials Contents Scope and Rates 2 What supplies are liable
EUROPEAN COMMISSION DIRECTORATE-GENERAL TAXATION AND CUSTOMS UNION Indirect Taxation and Tax administration VAT Brussels, 23 October 2013 Guide to the VAT mini One Stop Shop Table of Contents Background...
LUXEMBOURG Name of the firm Address Tax Connected S.à R.L. 62, avenue de la Liberté, L 1930 Luxembourg Contact Thierry Derochette email@example.com Tel. No. +352 26 37 78-1 Managing Partner
CZECH REPUBLIC Name of the firm Ú etní s.r.o. Address T ebohostická 12 Prague 10 Contact Pavel Ku e firstname.lastname@example.org Tel. No. +420 274 822 502 Tax Partner www.ucetnispol.eu/en/ AT A GLANCE Name of the
HEALTH SERVICE EXECUTIVE NATIONAL FINANCIAL REGULATION VALUE-ADDED TAX NFR-16 NFR-16 Value-Added Tax 16.1 Introduction on page 3 16.2 VAT Registration on page 8 16.3 Supply of Goods on page 11 16.4 Supply
INTERNATIONAL EXECUTIVE SERVICES 2013 Thinking Beyond Borders Ukraine kpmg.com Ukraine Introduction Individuals are subject to Ukrainian income tax as either tax residents or tax non-residents. Residents
VALUE ADDED TAX (VAT) Introduction VAT is an indirect form of taxation imposed on goods and services sold in Cyprus, as well as the acquisition of goods from the EU and the import of goods into the Republic.
INTERNATIONAL EXECUTIVE SERVICES 2013 Thinking Beyond Borders United Kingdom kpmg.com United Kingdom Introduction An individual s liability to income tax in the United Kingdom (UK) is determined by residence
Ireland By Brian Butler Place of Supply of Services: New VAT Rules Applying in the European Union INTERNATIONAL TAX JOURNAL Brian Butler is the head of VAT in the firm of A & L Goodbody Solicitors, Dublin,
TELECOMUNICATION, TELEVISION & RADIO BROADCASTING AND ELECTRONICALLY SUPPLIED SERVICES JANUARY 2015 INTRODUCTION 1. REGULATION AND GENERAL CONSIDERATIONS 2. MAIN CHANGES 3. OPERATORS INVOLVED INTRODUCTION
Ministry Of Finance VAT Department VAT Guidance for Financial Services Version 4: June 09, 2015 Introduction This guide is intended to provide businesses offering financial services with information about
EUROPEAN COMMISSION DIRECTORATE-GENERAL FOR TAXATION AND CUSTOMS UNION Indirect Taxation and Tax administration VAT and other turnover taxes TAXUD/1032/07-EN Part 9 VAT in the European Community APPLICATION
Tax Services / Leaflet, October 2013 VAT invoice requirements in Germany Businesses trading in Germany should ensure using the correct VAT rate to account for German VAT. The standard VAT rate is currently
EUROPEAN COMMISSION DIRECTORATE-GENERAL TAXATION AND CUSTOMS UNION Indirect Taxation and Tax administration VAT and other turnover taxes TAXUD/1032/07-EN Part 14 VAT in the European Community APPLICATION
EU: 2015 Place of Supply Changes Changes to the VAT place of supply for e-services EU: 2015 Changes to the place of supply From 1 January 2015, supplies of telecommunications, broadcasting and electronically
TAX DEVELOPMENTS IN POLAND UPDATE 2009 WARDYŃSKI & PARTNERS TAX PRACTICE APRIL 2010 1/8 INTRODUCTION The purpose of this report is to present key tax developments in Poland in 2009 which may be relevant
GREECE Name of the firm Tax Support Ltd Address A.Metaxa 33 16674 Glyfada Contact Nikos Dimitrakopoulos email@example.com Tel. No. +30 2108981633 Partner www.taxsupport.gr AT A GLANCE Name of the tax
INTERNATIONAL EXECUTIVE SERVICES Thinking Beyond Borders Tanzania kpmg.com Tanzania Introduction Taxation of individuals under the Income Tax Act 2004 (ITA) is on the basis of both residence and source.
ST. CHRISTOPHER AND NEVIS VALUE ADDED TAX REGISTRATION GUIDE Contents PURPOSE... 3 St. Kitts and Nevis Value Added Tax (VAT)... 3 Who is required to register?... 4 Who is a taxable person?... 5 What is
Mexican Tax Law By: Benjamin C. Rosen firstname.lastname@example.org Last Update: September 2006 INTRODUCTION Mexican companies (including subsidiaries of foreign companies), as well as permanent establishments
RESPONSE TO GREEN PAPER COM (2010) 695 On the Future of VAT Introduction The European Council of Optometry and Optics (ECOO) would like to thank you for this opportunity to submit views. As an organisation
VAT guide should I register for VAT? associates ltd Should I register for VAT? This guide will give you an understanding as to whether you should register, what the various schemes are for small businesses
International Tax Puerto Rico Tax Alert 12 June 2015 Tax reform enacted Contacts Francisco A. Castillo email@example.com Ricardo Villate firstname.lastname@example.org Michelle Corretjer email@example.com
COUNCIL OF THE EUROPEAN UNION Brussels, 23 June 2010 (OR. en) 10858/10 Interinstitutional File: 2009/0009 (CNS) FISC 60 LEGISLATIVE ACTS AND OTHER INSTRUMTS Subject: COUNCIL DIRECTIVE amending Directive
62 Back to Basics How to Avoid Costly VAT Compliance Mistakes Ethna Kennon Director, KPMG Anne Daly VAT Consultant, KPMG Introduction Given the economic climate, it is perhaps not surprising that businesses
www.pwc.dk Be prepared for Value Added Tax in Denmark A guide for non-resident businesses January 2012 This publication does not constitute and cannot replace professional consultancy. PricewaterhouseCoopers
14. Corporate Tax and Depreciation Corporate income tax is levied on income from the worldwide operations of Czech tax residents and on Czech-source income of Czech tax non-residents. Czech tax residents
INTERPRETATION NOTE: NO. 57 DATE: 31 MARCH 2010 ACT : VALUE-ADDED TAX ACT, NO. 89 OF 1991 (the VAT Act) SECTIONS : SECTIONS 8(7), 8(16), 11(1)(e) AND 18A SUBJECT : SALE OF AN ENTERPRISE OR PART THEREOF
Macau SAR Tax Profile Produced in conjunction with the KPMG Asia Pacific Tax Centre Updated: June 2015 Contents 1 Corporate Income Tax 1 2 Income Tax Treaties for the Avoidance of Double Taxation 5 3 Indirect
Chapter Avbreht, Zajc & Partners Ltd. Ursula Smuk 1 General: Treaties 1.1 How many income tax treaties are currently in force in? 44 income tax treaties are currently in force in. 1.2 Do they generally
THE NETHERLANDS Name of the firm Trade and tax Address Deken van Baarsstraat 8-A P.O. Box 2015 6020 AA Budel Contact Remon Kums firstname.lastname@example.org Tel. No. +31 (0)495 700210 Tax advisor www.tradeandtax.com
VAT Refunds Irrecoverable Tax A Country by Country Detailed Guide EC VAT refunds Irrecoverable Tax VAT incurred in other EC Member States may be recovered in certain circumstances. However, some claims
REPUBLIC OF GREECE LAW 4308/2014 GREEK ACCOUNTING STANDARDS, RELATED AND OTHER PROVISIONS (FEK A251/24-11-2014) UNOFFICIAL TRANSLATION 1 TABLE OF CONTENTS CHAPTER 1: SCOPE OF THE LAW AND CATEGORIZATION
Ministry Of Finance VAT Department VAT Guidance for Land and Property Version 4: November 1, 2015 Introduction This guide is intended to provide businesses supplying land and property within The Bahamas
Turnover Tax in the Netherlands For entrepreneurs not based in the Netherlands If you buy or sell goods in the Netherlands or provide services, you will have to deal with the Dutch rules on VAT. In this
Costa Rica Introduction A person s liability to Costa Rican income tax is determined by the territoriality principle, in opposition to the method of taxation based on residence status. However, residents
CROSS BORDER VAT CHANGES 2010 CHANGES TO THE PLACE OF SUPPLY OF SERVICES RULES AND TIME OF SUPPLY RULES IN RELATION TO CROSS-BORDER SUPPLIES OF SERVICES HMRC GUIDANCE Introduction This HMRC guidance document
DOING BUSINESS IN GERMANY Overview on Taxation March 2015 1. Introduction 1.1. Generally, taxes are administered and enforced by the competent local tax office. These local tax offices administer in particular
Jay M. Chadha, Fulbright & Jaworski LLP A Q&A guide to sales and use tax law in Texas. This Q&A addresses key areas of sales and use tax law such as tax scope, multi-state transactions and collecting taxes
INTERNATIONAL EXECUTIVE SERVICES Thinking Beyond Borders Uganda kpmg.com Uganda Introduction An individual s liability to income tax in Uganda is determined according to the nature of income earned and
Ministry Of Finance VAT Department VAT Guidance for on the Treatment of Motor Vehicles Version 4: November 1, 2015 Introduction This guide is intended to provide those selling or hiring vehicles by way
Malta Tax Services New VAT invoicing rules Key features VAT Insight Issue No. 2012/04 December 2012 Contents: Overview Applicable rules for invoicing Content of invoices Deadline for issuance of invoices
Ministry Of Finance VAT Department The Bahamas VAT Guide Version 5: November 1, 2015 1 Introduction This Value Added Tax ( VAT ) guide aims to provide a general understanding of how VAT works, who needs
VAT CHANGE OF THE STANDARD RATE TO 20 PER CENT: A DETAILED GUIDE FOR VAT-REGISTERED BUSINESSES Version 2: December 2010 Contents Page 1 INTRODUCTION... 4 2 SALES... 7 2.1 WHEN DO I HAVE TO START CHARGING
ROYAL MALAYSIAN CUSTOMS GOODS AND SERVICES TAX GUIDE ON VALUERS, APPRAISERS AND ESTATE AGENTS CONTENTS INTRODUCTION... 1 Overview of Goods and Services Tax (GST)... 1 GST AND VALUERS, APPRAISERS AND ESTATE
Ministry Of Finance VAT Department VAT Guidance for the Retail & Wholesale Sectors Version 5: November 1, 2015 Introduction This guide is intended to provide businesses operating in the retail and wholesale
For foreign es Revision of Consumption Taxation on Cross-border Supplies of Services National Tax Agency, May 2015 In accordance with the Act for Partial Revision of the Income Tax Act and Other Acts (Act
Tax-effective giving made simple July 2015 1 Sayer Vincent LLP Chartered accountants and statutory auditors Invicta House 108 114 Golden Lane London EC1Y 0TL Offices in London, Bristol and Birmingham 020
RELEVANT TO ACCA QUALIFICATION PAPER F6 (UK) AND PERFORMANCE OBJECTIVES 19 AND 20 Value added tax (VAT), part 2 This article is relevant to candidates sitting the Paper F6 (UK) exam in 2012, and is based
Italian corporate income tax for foreign investors 05 October 15 Corporate income tax Italian corporate income tax (imposta sul reddito delle società, or IRES) is due by resident companies on their worldwide
Tax Planning Checklist For the year ended 31 March 2014 Contents Year end tax planning checklist 1 General tips on minimising tax 4 Help us to process your records efficiently and quickly 5 Help yourself
Saudi Arabia Tax Guide I IMPORTANT DISCLAIMER: No person, entity or corporation should act or rely upon any matter or information as contained or implied within this publication without first obtaining
China: Country VAT / Business Tax Essentials Guide 2015 kpmg.com 2 China: Country VAT / Business Tax Essentials Guide 2015 China: Country VAT / Business Tax Essentials Guide 2015 3 China: Country VAT /
EUROPEAN UNION ACCOUNTING RULE 17 REVENUE FROM NON-EXCHANGE TRANSACTIONS (TAXES AND TRANSFERS) Page 2 of 26 I N D E X 1. Introduction... 3 2. Objective... 3 3. Scope... 3 4. Definitions... 4 5. Non-exchange
VAT Guidance Accounting for VAT Version 4: November 1, 2015 PAGE 1 Introduction This guide is intended to provide VAT Registrants with information on how they should account for Value Added Tax ( VAT ).
TAX ISSUES RAISED BY LNG PROJECTS Jon Lobb Baker Botts L.L.P. ABSTRACT This paper discusses tax issues that may be encountered by a company investing in an LNG project. 1. Income Taxes A seller's income
General Terms and Conditions of 1. Scope 1.1 All supplies and services by (in the following: Irlbacher) are subject exclusively to the following terms and conditions: 1.2 Terms and conditions of commercial
www.bakertillyinternational.com International Tax Contact Moscow Andrey Kirillov T: +7 (495) 783 88 00 email@example.com Corporate Income Taxes Resident companies, defined as those which
ST. CHRISTOPHER AND NEVIS VALUE ADDED TAX REGISTRATION GUIDE Contents PURPOSE... 3 St. Kitts and Nevis Value Added Tax (VAT)... 3 Who is required to register?... 4 Who is a taxable person?... 5 What is