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Taxability of Settlement Payment in Out-of-Court Dispute: FG Baden-Württemberg Decision on 12.10.2023

  • FG Baden-Württemberg had to determine if a settlement payment from a contractor to a subcontractor is payment for a taxable service or non-taxable damages
  • The payment was made to settle all mutual claims, waive potential claims, and avoid a civil lawsuit
  • The case is pending revision at the Federal Fiscal Court under XI R 33/23

Source: datenbank.nwb.de

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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