Germany

Exemption for supplies for victims of Turkey and Syria earthquake While 2022 and the start of 2023 has seen an explosion of fiscal-related policies specifically pertaining to an environmental agenda, fiscal policies intrinsically can also be linked to humanitarian disasters. Most discernibly, we saw this exemplified during the pandemic.    Similarly, we can expect to see countries enact similar policies in respect of the recent earthquake in Turkey and Syria, which has sparked a significant humanitarian disaster in the region. Germany is at the forefront of such policies, and it has announced specific exemptions for victims of the earthquake.    You can read more about the exemptions in Germany’s publication here.  

VAT rate revisions The ongoing inflation crisis has a direct correlation with the VAT rates that countries deploy.   Germany has introduced the following VAT rate revisions: 

• Temporary VAT reduction to 7% on energy supplies- specifically gas supplies, as well as supplies of heat via a heating network, effective 1 October 2022 to 31 March 2024 
• Restaurant and catering services were subject to a reduced rate since the start of the Covid pandemic. The reduced rate of 7% has now been extended until 31 December 2023 
• Subject to certain conditions, certain photovoltaic systems and their main components will be zero-rated from January 2023.  

Such policies serve to illustrate how societal issues and seismic events, such as inflation and the Covid pandemic, dictate VAT rates both in Europe and globally.  Germany is a compliant territory for Tungsten Network and our e-invoicing solution supports all valid VAT rates in the country.    

Tour operator VAT delayed Germany has delayed the implementation of a VAT obligation on non-residents that sell German travel packages to tourists.   This was due to take effect on 1 January 2023 but has been delayed to at least 2024. 

Formal derogation request to mandate e-invoicing Germany is following the lead of multiple European countries and has formally requested the European Commission for a derogation to mandate e-invoicing in the country. A country-wide e-invoicing model has been proposed by the German tax authorities but presently, very little detail is known about the proposed e-invoicing model and how this will operate.  Recent developments regarding the VAT in the Digital Age (ViDA) proposal (please refer to Europe updates) may impact the German e-invoicing mandate. However, it is anticipated, in line with the new regulations, that Germany will adopt the EU standard on e-invoicing (EN 16931).   Germany is a key compliant territory for Tungsten and we are closely monitoring e-invoicing developments in the country, including how the ViDA developments will influence Germany’s e-invoicing mandate.  

Obligation to report income on digital platforms As 2022 draws to a close, a significant observation over the past year has been the number of countries who are imposing obligations to report income on digital platforms.   Germany is the latest country to impose such obligations.   The Finance Committee approved the draft law introduced by the Federal Government to implement Council Directive (EU) 2021/514 of 22 March 2021 amending Directive 2011/16/EU on administrative cooperation in the field of taxation and modernising tax procedural law.  Please refer to 20/3436 for further details. 

Extension of VAT reduction for hospitality services Due to surging inflation in the country, Germany has extended the VAT reduction on hospitality services to 31 December 2023. The VAT rate for hospitality services was initially reduced from19% to 7% and was due to expire on 31 December 2022. We can expect other countries to adopt similar fiscal measures as inflation continues to have a significant impact on the tax measures countries deploy.

Factur-X – updated version The National Forum for Electronic Invoicing and Electronic Public Procurement (FNFE-MPE) and the Forum Elektronische Rechnung Deutschland (FeRD) have published an updated version of the Factur-X 1.0.06/ZuGFeRD 2.2. Technically, these are identical hybrid formats (PDF invoices with embedded XML). Therefore, the technical specifications are now combined in one uniform document, and are available in English, German and French. The links can be found as follows: https://fnfe-mpe.org/factur-x/factur-x-et-zugferd-2-2/ https://fnfe-mpe.org/factur-x

B2G E-invoicing in German Federal States – update

There have been large strides made in the B2G landscape in the German Federal States.
In the Federal States of Sarre, Baden Wurttemberg and Hamburg, it is now mandatory for suppliers to issue electronic invoices as of 1st January 2022. This excludes direct orders with a value of under 1,000 Euros.
Other states are expected to follow, including West Mecklenburg-Pomerania in 2023, Hesse in 2024 and Rhineland-Palatinate in January 2024.

New Government coalition plans to introduce continuous transactions controls (CTC)

Governments introduce continuous transaction controls (CTC) to more effectively counter tax fraud and increase revenue. As part of introducing CTCs in their mandates, governments often require invoice data to be sent to tax authorities in real-time or require invoices to be cleared by the government before they are paid.

Germany is planning to introduce CTCs to this effect. There are no specific details, but Tungsten will keep up to date with any development around this.

VAT Rates Germany: temporary VAT reductions now rolled back

As part of its economic stimulus package, Germany lowered their VAT rates in July 2020 to 16% for the base rate and 5% for the reduced rate. This tax measure ended on 31 December 2020, as planned.
From 1 January 2021 the “old” VAT rates (19% base rate and 7% reduced rate) will apply as before July 2020. What does this mean:
• Invoices for goods and services with a time of supply (tax point) after 31 December 2020 must use the original VAT rates (19% and 7%)
• Invoices for goods and services with a tax point before January 1, 2021, must still use the July 2020 rates: 16% and 5%

Click here to learn more about the German mandate.

Germany’s B2G e-invoicing approaches second phase

Germany has announced its schedule for mandatory B2G e-Invoicing. As April approaches, the second phase will come into action for the regional and communal levels. Tungsten is here to help – we can support your invoice delivery of the XRechung through our PEPPOL connection.

Click here to learn more about the German mandate.

Germany mandates B2G e-invoicing

The European Union (EU) VAT Directive 55 obliges all EU public authorities to receive invoices electronically by 27 November 2018.

Click here to learn more about the German mandate.