A recent ruling by the Federal Fiscal Court (BFH) regarding the VAT rate applicable to food items with promotional packaging. The court determined that despite the promotional nature of the packaging, the reduced VAT rate should be granted. The case involved a trader of promotional goods who sold customized food items with personalized packaging. The tax authority considered the sale of these promotional food items as a service subject to the standard VAT rate. However, the BFH ruled in favor of the taxpayer, stating that the packaging shares the VAT treatment of the goods it contains if it is customary for packaging those goods. The court emphasized that the inclusion of promotional printing does not affect the eligibility for the reduced VAT rate. The BFH referred the case back to the lower court for further examination of the specific characteristics of the promotional food items and their packaging. The article concludes by noting that dealing with customs classification of goods and packaging can be a challenging task for businesses and their tax advisors.
Source: nwb-experten-blog.de
