Personal Budget and VAT Exemption: BFH Ruling on Care Services and Indirect Cost Coverage

• The case involves a decision by the Federal Finance Court of Germany regarding personal budgets and VAT exemption.
• The court ruled that care services can be VAT-exempt if funded through a personal budget, provided the funding decision explicitly recognizes the service provider.
• The previous ruling by the Hessian Finance Court was overturned and the case was sent back for further proceedings.
• The plaintiff, a limited partnership, provided comprehensive care services to residents with mental health issues from 2013 to 2016.
• Residents applied for personal budgets to fund these services, with agreements made with a regional welfare association.
• If residents did not meet agreed goals, they had to repay the budget to the welfare association.
• The plaintiff charged residents for services based on the budget approval, regardless of goal achievement.

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.

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