In its ruling of 26 June 2019, the Federal Fiscal Court (Bundesfinanzhof, BFH) initially ruled that entrepreneurs could rely on the on the direct application of Art. 64 (1) of the VAT System Directive (VAT Value Added Tax Directive (VAT Directive).
This decision is no longer valid due to the latest case law of the BFH in its ruling of February 1, 2022 – V R 37/21 (V R 16/19)
In its ruling of February 1, 2022 – V R 37/21 (V R 16/19), BStBl II 2022p. XXX, the BFH has ruled that the accrual of tax pursuant to Section 13 (1) no. 1 letter a sentence 1 UStG is not to be is not limited to claims for payment that are already due.
A partial performance within the meaning of § 13 para. 1 No. 1 letter a sentence 3 UStG, in which the remuneration for certain parts of an economically divisible parts of an economically divisible service, requires a service with a continuous or recurring character.
The national concept of partial performance in Section 13 (1) no. 1 letter a sentence 3 UStG corresponds, at least as a rule, to the definitions of Art. 64 (1) of the VAT Directive, since the economically divisible service is a service with a “continuous or recurring character”.
An application of § 13 para. 1 no. 1 letter a sentence 3 UStG to a one-off service in return for a mere payment in installments is excluded.
This removed the doubts as to the correct implementation of Art. 64 para. 1 VAT Directive by the national concept of partial services, which had previously been raised on the basis of the ECJ ruling of baumgarten sports & more of November 29, 2018 – C-548/17 (EU:C:2018:970) (preliminary ruling on the BFH ruling of June 26, 2019 – V R 8/19 (V R 51/16)) had arisen.
Furthermore, in its above-mentioned ruling of February 1, 2022, the BFH ruled that the agreement of an installment payment does not constitute uncollectibility within the meaning of Section 17 (2) No. 1 UStG.
Source: bundesfinanzministerium.de
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