- Issuing “Trade Credits” for payment is considered an agreed, not a paid, consideration.
- The consideration is only deemed paid when the supplier redeems the “Trade Credits” for goods or services.
- Until redemption, “Trade Credits” are merely a promise of offset.
- If “Trade Credits” are never redeemed, a VAT input tax adjustment (§ 17 Abs. 1 Satz 2 UStG) may be required.
Source: datenbank.nwb.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"
- ECJ Confirms Legality of German VAT Apportionment for Hotel Accommodation and Ancillary Services
- Input Tax Deduction for Factoring Services: Mere Receivable Purchase Is Not a Taxable Factoring Service
- VAT Liability on Services Provided by Non-Profit Sports Clubs to Their Members
- VAT Treatment of Coworking Services: Legal Uncertainties and Practical Risks for Operators and Users
- VAT Treatment of Compensation for Unlicensed Public Use of Protected Works: EU Court Ruling
