The new regulation on the taxation of legal entities under public law in Germany’s VAT Act is facing ongoing delays due to its complexity and challenges for the public sector’s decentralized organizational structure. The tax compliance structures need to be established to define responsibilities and competences clearly. The tax authorities have addressed the issue of input VAT deduction for legal entities under public law, who face additional challenges in determining whether goods and services are allocated to the taxable or non-taxable sector.
Source KMLZ
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