• Service: Tax, Global Indirect Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 2/14/2014

Germany - VAT-able amount on intermediary services with customer discounts 

February 14:  In response to a submission from the German federal tax court, the Court of Justice of the European Union (CJEU) issued a judgment stating its position on the reduction of the taxable amount on intermediary services when discounts are granted to end-customers.

The case concerned a German travel agency that provided taxable intermediary services to tour operators in Germany. The CJEU found the only party that could be considered the first link in the supply chain would be the tour operator. However, there was no supply chain because the tour operator provided its services directly to the end-customer and the German travel agency acted only as an intermediary for that transaction.

KPMG observation

The CJEU judgment is viewed of being of considerable importance because its impact will extend beyond the German travel industry and would affect other businesses where goods or services are sold via an intermediary.

Read a January / February 2014 report [PDF 410 KB] prepared by the KPMG member firm in Germany: VAT Newsletter (January / February 2014)

The KPMG report also discusses the following VAT-related topics:

  • Applying the surface area method to mixed use buildings
  • Supply of “free cell phones” by an agent for mobile phone contracts
  • Unauthorized VAT statement on invoices for small amounts
  • Pending appeal regarding allocation of moving supply in chain transactions
  • Allocating input supplies as per § 15 (1) UStG
  • Transfer of a business as a going concern
  • Disposal of multiple supplies subject to different tax rates at a flat total sales price
  • Organizational integration for a VAT group

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