Germany - Changes in the area of VAT

With effect from 1July 2010

Further to our last VATtrends issues and our news item from May, we would like to provide you with further details in respect to the changes in the German VAT legislation with effect from July 1st, 2010.

VAT exemption will be discontinued for some of the postal services of the Deutsche Post, however, some of the services will remain subject to VAT.

  • The following services will remain exempt from VAT:
    • Standard, compact and large letters, Maxibrief items and postcards;
    • Registered items;
    • Infobrief;
    • Strafbandzeitung (wrapper-packed newspaper service);
    • DHL Parcels with weight up to 10 kg;
    • All items bound for destinations outside the EU, regardless of the product type.
    • However, the below Deutsche Post products (destination Germany) will be subject to German VAT starting July 1st, 2010:
    • Infopost;
    • Cash-on-delivery items;
    • Standard periodicals and preferred periodicals;
    • DHL Parcels with weight more than 10 kg;

Please note that if you are a business customer of Deutsche Post, however, VAT registered and established in a different EU Member State, the general reverse charge mechanism according to Art. 44 of the VAT Directive will apply and therefore, it will be your responsibility to account for the VAT according to the VAT legislation in the country of your establishment.

  • The German Federal Ministry of Finance has published a standard form of confirmation of being a taxable person for the purpose of confirming taxable status. Such a form should be used when German companies file VAT refund claims into non EU countires (e.g. German company claiming VAT incurred in Switzerland). The form can be accessed from the following link:  bundesfinanzministerium
    The local tax office of such German company will confirm the taxable status on the form, which will be valid for 1 year.
  • Europen Sales List (ECSL) will have to be submitted on a monthly basis until the 25th day of the following month the submission period (exceptions exist – where taxable persons supply goods or sevices below € 100,000 until 31.12.2011 and below € 50,000 from 1.1.2012, quartely instead of monthly ECSL may be submitted).
  • An intra-Community supply of goods has to be reported in the period on the ECSL, when the relevant invoice has been issued, or by the end of the month following the month when thesupply took place. Services falling under the Art. 44 of the Directive have to be reported on the ECSL in the period, when such a service has been carried out, irrespective of when the relevant invoice has been issued.
  • Further, where the taxpayer identifies that the ECSL has been submitted with incorrect data, the period in which such a mistake has to be corrected has been reduced from 3 to 2 months.

Please note that the below changes will take effect on January 1st 2011.

  • The application of the reverse charge mechanism according to Art. 13b of the German VAT Act will be extented. The supply of industrial scrap, scrap metal and waste materials will then also be subject to the reverse charge, i.e. the recipient of the supply will be liable to account for VAT that is due on the supply.
  • In addition to the above supplies, the following services will also be subject to the extended reverse charge mechanism: cleaning of buildings including the cleaning of building facades, rooms, inventar and window cleaning.