In a recent ruling (V R 13/22) concerning VAT on the management of “dependent foundations,” the Federal Fiscal Court (BFH) addressed the taxability of administrative services related to separately managed assets. The court stated that a taxable administrative service exists if it pertains to a segregated asset pool, irrespective of whether the recipient’s benefit involves their own or third-party interests, including non-profit ones. The BFH overturned the lower court’s decision, which had denied a taxable service to the grantors, and remanded the case for further proceedings. The lower court had reasoned that the “dependent foundations” were not VAT recipients and that the services benefited the foundation’s assets, already under the plaintiff’s ownership due to donations with conditions. However, the BFH highlighted that the plaintiff and the grantors had distinct contractual agreements beyond the donation, where the plaintiff provided administrative services for a fee from the foundation’s assets, thus establishing a taxable exchange. The court concluded that the grantors, by entrusting the plaintiff with asset management for specific purposes, received a consumable benefit, making the administrative services subject to VAT.
Source: bundesfinanzhof.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.
