- ECJ ruled in July 2023 that municipalities levying spa tax are not acting in taxable supply
- Many spa communities faced financial ruin due to input VAT deduction restrictions
- German Federal Fiscal Court made new judgements in October and December 2023
- Court realigned jurisprudence on input VAT deduction for spa communities
- Court ruled that spa tax is linked to provision of spa facilities, not actual use
- Spa communities can now benefit from input VAT deduction again
- Clarity provided for future practice in spa communities regarding VAT deduction
Source: kmlz.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.
