Internal Transactions in VAT Groups: Non-Taxability Extended to Non-Economic Activities per BMF Guidance

• Internal services within a VAT group are not subject to VAT, whether used for business or non-economic activities.
• The BFH confirmed, following the ECJ, that paid services between group companies and the controlling entity remain non-taxable.
• The tax authority clarified that this non-taxability applies to both business and non-economic uses, updating the VAT application decree accordingly.
• The changes apply to all open cases, but the previous rules may still be used until December 31, 2026.
• A separate statement on cross-border VAT groups will be issued.

Source: ebnerstolz.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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