The German Court (5th senate of the tax court Münster) made a decision on the question if a professional dog breeder was a taxable person for VAT or not. The conclusion was that this was the case.
The plaintiff had exercised an economic activity in the sense of § 2 Abs. 1 UStG with the dog breeding. It had participated in the general market by selling the dogs to third parties against payment. These sales were not merely the result of the plaintiff’s hobby and crossed the line into private asset management.
For marketing purposes, she had taken sales measures that were generally established among dealers – such as an Internet presentation. The high quality standard, which it applied to the selection of its breeding dogs and also to the selection of the buyers, had at the same time an advertising effect.
Since it is not necessary to maintain a business premises in order to act like a trader, the fact that the dogs live in the plaintiff’s private household and that she spends the nights after a litter together with the dog does not stand in the way of her economic activity.
The plaintiff had also continued over several years and had thus become sustainably active. Finally, against the background of the principle of neutrality applicable in the value-added tax system as an expression of the requirement of equality of competition, it was system-compatible to subject the plaintiff’s sales to value-added tax.
There is at least potential competition with other dog breeders – even those not organized in an association.
The appeal against this ruling is pending before the Federal Fiscal Court under the case number XI B 33/21. (FG Münster, communication of 17.05.2021 regarding judgment of 25.03.2021 – 5 K 3037/19 U; BFH reference number: XI B 33/21)
Source: steuerberater-berning.de
