- The German Federal Ministry of Finance clarified that administrative services for dependent (fiduciary) foundations are subject to VAT if they relate to special assets, regardless of whether the beneficiary pursues their own or third-party interests.
- The Federal Fiscal Court (BFH) set criteria for VAT taxation of fiduciary activities, focusing on whether trustees provide taxable services to themselves or the founder.
- A taxable administrative service exists if it relates to special assets, even if the assets are legally owned by the administrator but are separated from their other assets and a fee is paid.
- For VAT liability, there must be a direct link between service and payment, the recipient must be identifiable, and must receive a consumable benefit; the founder can be considered the recipient.
- The new rules apply to all open cases, but fiduciary foundations previously treated as entrepreneurs may continue this treatment for VAT purposes until December 31, 2026.
Source: blogs.pwc.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.
Latest Posts in "Germany"
- XRechnung Invoice Format: A Detailed Guide for Germany’s e-Invoicing Compliance
- VAT on Animal Tendons and Stomachs
- VAT Exemption Denied for Administrative Services Between Medical Services Providers
- VAT Exemption for Aesthetic Surgeries and Treatments Under German Tax Law
- VAT Liability in Online Goods Trade: New USt 1 TK Notice Form
