• Service: Tax, Global Indirect Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 11/1/2013

Germany - Consolidation of VAT groups 

November 1: Germany's federal tax court (Bundesfinanzhof - BFH) changed its position on the rules for organizational integration of companies into value added tax (VAT) groups.

According to the BFH, a consequence of a "merger into a single taxpayer" as a VAT group is that the controlling company (the entity liable to tax) must act as a collector of taxes for all subsidiaries and collect public funds on behalf of the government. This, according to the BFH, would require a "superior-inferior" relationship between the controlling company and the group subsidiary, respectively—a relationship by which the controlling company would, by reason of the financial integration, be able to exercise control over the subsidiary's day-to-day business activities.

Read a September/October 2013 report [PDF 416 KB] prepared by the KPMG member firm in Germany: VAT Newsletter (2013)

The KPMG report on indirect tax developments affecting taxpayers in Germany also includes:

  • Splitting input tax on turnover from branches in other EU Member States or third countries is addressed in a Court of Justice of the European Union (CJEU) case
  • Changes to the documentary requirements for intra-Community supplies of goods, effective 1 October 2013
  • Changes to the VAT law, pursuant to AmtshilfeRLUmsG
  • Payments by a manufacturer/dealer to "autobanks" and other financial institutions

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