The draft of the German Annual Tax Act 2019 (JStG 2019) contains many amendments to VAT law. These amendments primarily transpose EU legislation into German law. One focus of the JStG 2019 is the transposition of ‘quick fixes’ – new provisions affecting the entire intra-Community movement of goods.
The draft introduces numerous other less conspicuous amendments which are likely to affect many companies. These amendments include the extension of the Tour Operator’s Margin Scheme (TOMS) for travel services to the B2B sector or the denial of an input VAT refund in cases of evasion.
Transposition of the quick fixes
With the transposition of the quick fixes (Art. 17a, Art. 36a and Art. 138 VAT Directive) into German law through the JStG 2019, the provisions for intra-Community supplies and chain transactions will be amended. What’s more, a regulation will be introduced for supplies via consignment warehouses.
For the first time, the quick fixes will regulate chain transactions throughout the EU.
As the EU provision closely resembles the existing German regulation, the current definition of chain transactions will remain the same. The movement of goods can still be assigned to only one consignment. Some of the existing administrative instructions to determine the moved supply will be incorporated into the VAT Act.
For example, the movement of goods must be determined according to the reason for the transport. If they are transported by or on behalf of the supplier/consignor, its consignment is moved. If the last recipient in the chain is responsible for transport, the consignment is moved to it (collection case).
If an agent transports the goods, the fiction that (i) the agent in principle acts as the recipient, and (ii) the consignment therefore has been moved to it, continues to apply. But it is still possible to rebut this fiction, and for the supplier/consignor to be responsible for transporting the goods. The law requires the agent to give the supplier its VAT ID number from the country of shipment before the start of transport.