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VAT Treatment of Copyright Warnings: Lower Tax Court Ruling and Disputed Payments

  • The ruling concerns the VAT treatment of copyright warnings.
  • The plaintiff worked as an independent architectural photographer and contracted a lawyer to pursue copyright infringements.
  • The lawyers demanded that infringers stop unauthorized use of the photo and claimed damages and compensation.
  • The Lower Tax Court concluded that all payments made by the infringer constitute a payment for a supply provided by the copyright holder.
  • An appeal has been lodged against this ruling.
  • The BerlinBrandenburg tax court states that it does not matter whether the warning party claims compensation for expenses or damages.
  • The tax court does not examine in detail whether the entire amount paid constitutes remuneration for the warning service.
  • The BFH ruling from 2019 did not clearly answer the question of whether the entire amount paid constitutes remuneration for the warning service.
  • The BMF guidance states that no objection will be raised if those involved agree to assume there is no payment subject to VAT for copyright infringement made before 1 November 2021.

Source: hub.kpmg.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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