VAT News

EC-Letter of formal notice issued to Germany

The European Commission (EC) has recently sent a letter of formal notice to Germany. Their view is that Germany violates the rules on VAT refunds based on existing EU VAT legislation.

Under the current German VAT legislation, a taxable person established in Germany that applies for a VAT refund from another EU Member State via the German online system can lose the right to this refund as a result of Germany not following up on potential error messages from the EU Member State of refund.

Furthermore, the EC considers that Germany is violating the administrative cooperation rules where it is requested by an EU Member State of refund to notify resident taxable persons of the relevant rules and decisions, but fails to do so.

Germany now has 2 months to act and if they do not do so, a reasoned opinion will be issued by the EC.

Any German businesses who have had cross-border VAT claims rejected and not been given full information on the rejection should review the position.

Related articles

Why overlooking the VAT determination process is detrimental in the era of tax digitalisation

As tax moves into the digital world, hundreds of thousands of organisations across Europe will face substantial challenges when it comes to adhering to VAT.

Read more
Infringement Proceedings Brought Against Germany Over E-commerce VAT Rules

The European Commission decided to initiate formal infringement proceedings against Germany over section 22f & 25e of the German VAT Act.

Read more
HMRC Issue Letters on No-Deal Brexit Advice For UK Businesses Trading within the EU

HMRC letters to VAT-registered businesses trading with the EU explaining how to prepare for changes to customs, excise and VAT if the UK leaves the EU without a deal.

Read more