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Germany: Approved Bill for Annual Tax Act 2018

German Bill approved for an Annual Tax Act 2018

The German Ministry of Finance approved a bill for an Annual Tax Act 2018 (Entwurf eines Jahressteuergesetzes 2018).

If passed, the changes in the draft bill with impact foreign investors with German real estate investments.

The main purpose of this bill is to adapt the German tax laws and make them more in line with EU law. The changes will take effect from 1st January 2019.

The main points of the bill in relation to VAT are:

  • Adopting the EU Directive 2016/1065 and amending the EU VAT Directive 2006/112 as regards the treatment of vouchers.
  • Implementation of EU Directive 2017/2455 (E-Commerce package). Simplification measures have been introduced for intra-EU telecommunication, broadcasting and electronically supplied services. If the taxable persons do not exceed the annual total value of EUR 10,000, regarding those services, they can continue to apply the VAT rules of their country of origin.
  • Introducing a VAT liability for operators of online marketplaces for VAT not collected by vendors, including those not registered with the German tax office. German VAT registration certificates and digital confirmation from the German federal tax authorities of the sellers will have to be kept on record by the Marketplaces.

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