VAT Treatment of Parking Management Contracts

• The European Court of Justice (ECJ) has ruled that control fees charged by private parking operators for violations of usage conditions are taxable and subject to VAT.
• The ECJ considers these control fees to be directly related to the parking service and an integral part of the total amount paid by the driver for parking on the managed parking area.
• The German tax authorities have incorporated this ruling into their guidelines, stating that control fees collected by private parking operators are considered compensation for a taxable service.
• Prior to the ECJ ruling, control fees were generally considered non-taxable damages in Germany.
• The tax authorities have introduced a non-objection rule for payments received by the operator until December 15, 2023, allowing them to continue treating the fees as non-taxable damages.
• If businesses park on these private parking areas and violate the usage conditions, they may be eligible for VAT deductions on the control fees, provided that proper invoices are obtained.
• The ECJ ruling may have implications for other situations, such as increased transportation fees for traveling without a valid ticket.

Source: haufe.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.

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