Non-taxable grants to non-profit institutions

In its decision of 23 September 2020 (XI R 35/18), the Federal Fiscal Court held that financial allocations from shareholders to a joint subsidiary can constitute genuine (non-taxable) grants. The mere exercise of the shareholders’ general interests is not sufficient to assume a taxable supply. The Federal Fiscal Court has now clarified its previous restrictive jurisprudence based on recent ECJ judgments. It is also to be welcomed that the Federal Fiscal Court interprets the concept of competition within the meaning of Art. 132 lit. f) and I) of the EU VAT Directive in a restrictive manner.

Source: kmlz.de

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