German Ministry of Finance does not consider the EU TOMS rules to apply to businesses established outside the EU. This means that non-EU businesses (including those in the UK) would be required to register for German VAT and pay German output VAT when supplying travel taking place in Germany (i.e. those services which were previously subject to the standard rate of UK VAT on the margin under TOMS). We understand that German input VAT recovery would be permitted accordingly, subject to the normal input VAT recovery rules leaving the exposure essentially as VAT on the margin. This has now been confirmed to commence with effect from 31 December 2021. UPDATE on 2 December 2021 – we now understand this requirement for Germany to be postponed until 1 January 2023.
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