At its meeting on 18 October 2017, the Federal Council adopted the partially revised VAT Ordinance. With the exception of the mail order business, the partially revised VAT Act and the partially revised VAT Ordinance will therefore enter into force together on 1 January 2018.
The partially revised VAT Ordinance contains - in addition to other selective changes - in particular the following adjustments to the partially revised VAT Act:
- Companies do not now have to register with the FTA as taxable persons if they only provide tax-exempt services in Germany. This reduces the administrative burden.
- The ordinance defines the electronic newspapers, magazines and books that can now be controlled at a reduced rate. They must essentially fulfil the same function as printed editions. The aim is that newspapers, journals and books can benefit from the reduced rate largely independently of their form of publication. In response to the criticism in the consultation procedure, the Federal Council is waiving the requirement that electronic books must be published by a publishing house.
- The ordinance also determines which collectors' items such as works of art, antiques and the like are subject to margin taxation. Margin taxation is to cover everything that is tradable in the field of fine arts. This means that VAT is also neutral for the art trade, but without the disadvantages of deducting fictitious input tax, which can lead to systematic undertaxation in the art sector.
- In addition, the Regulation also contains clarifications concerning the settlement of net and flat-rate tax rates.
The press release of the FTA as well as further documents in connection with the amendment of the VAT Ordinance are available here. Further information on the partial revision of the VAT Act can be found here (see also our articles of 6 June 2017, 21 June 2017 and 3 July 2017).
