- Bundesrat approved the German Annual Tax Act 2024 on 22 November 2024 after the Bundestag adopted it on 18 October 2024
- The act includes VAT related changes particularly affecting the definition of a delivery of work
- The definition now states that a delivery of work exists only in cases of processing and finishing goods owned by a third party
- This change is based on the German Federal Tax Court ruling from 22 August 2013 and will take effect the day after the law is promulgated
- The 2013 ruling was already incorporated into the German VAT application guide effective from 1 July 2021
- The legislative update significantly impacts sec. 13b para. 2 no. 1 of the German VAT Act, especially concerning foreign suppliers who now face increased registration requirements
- German service recipients must verify if an invoice with German VAT involves a supplier processing a foreign object
Source: hub.kpmg.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.
