- The BFH held that top-up payments in transfer company models are generally subject to VAT.
- These payments count as consideration for a taxable service provided by the transfer company to the former employer, even if the money ultimately benefits employees or is handled via trust accounts.
- The BFH rejected VAT exemption, saying the service is mainly economic rather than a social welfare service.
- For practice, this increases legal certainty and matters for restructurings and workforce reductions.
Source: ecovis-kso.com
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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