- The Lower Saxony Fiscal Court ruled that Section 25 of the German VAT Act (UStG) applies to tour operators from third countries, not just those established in the EU.
- The court found that neither the wording of Section 25 UStG nor the relevant EU VAT Directive articles restrict the provision to EU-based entrepreneurs.
- The court rejected the German tax authorities’ position and held that advance payments received by the plaintiff (a third-country tour operator) for trips in Germany were not taxable in Germany.
- The court emphasized that the purpose of margin taxation—simplification and fair tax distribution—would not be undermined by including third-country operators.
- The decision is under appeal at the Federal Fiscal Court (BFH).
Source: hub.kpmg.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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