No Flat Rate Taxation for Waiving a Contractual Delivery Right – BFH Ruling

• The Federal Fiscal Court (BFH) had to address the question of whether the paid waiver of a contractual delivery right by a farmer is subject to the average rate taxation according to § 24 para. 1 sentence 1 no. 3 UStG.
• The waiver of a farmer’s contractual delivery right (by agreeing to the premature termination of a contract for the delivery of food) against a “compensation payment” is taxable and does not fall under the average rate taxation according to § 24 UStG.
• A partnership (GbR) entered into a contract with a GmbH & Co.KG for the delivery of 70% of the food produced by the partnership (field salad, rocket, spring onions, wild herbs, leaf lettuce).
• The partnership had a delivery obligation and the GmbH & Co.KG had a purchase obligation.
• The contract could be terminated for the first time on December 31, 2015.
• The deliveries of the partnership were made using the average rate according to § 24 para. 1 sentence 1 no. 3 UStG.
• This contract was terminated on May 31, 2013.
• The GmbH & Co.KG then paid a “compensation payment” to the partnership to compensate for the losses resulting from the premature termination of the contract, using the average rate according to § 24 para. 1 sentence 1 no. 3 UStG.

Source: datenbank.nwb.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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