Germany: VAT Exemption for Co-Leasing of Operating Equipment Accepted

• The German Federal Ministry of Finance (BMF) accepts the Federal Fiscal Court’s (BFH) revised case law on VAT exemption for the co-rental of operating equipment under Section 4 No. 12 German VAT Act.
• Where there is a single economically unified supply, the VAT exemption for property leasing can also cover the co-rental of operating equipment if it qualifies as an ancillary service.
• In that case, the statutory rule requiring apportionment does not apply, meaning the co-rental of operating equipment is not separately treated as taxable.
• This follows the CJEU’s view that economically single supplies must not be artificially split into exempt and taxable components under the EU VAT Directive.

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.

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