§ 13b UStG Customer is Dutch, service took place in Germany.
August 26, 2010 | 55,00 EUR | answered by Dipl.BW/SB Ulrich Stiller
Good day, our domestic client has performed a construction service for a Dutch customer. The place of performance was in Germany, as the construction site was located here, and the invoice was written to the address of the Dutch customer. Now the tax auditor has criticized the fact that the reference to §13b USTG is missing on the invoice (the invoice was incorrectly exempt from tax by the client according to § 3a (2) No. 1 UStG), so VAT has not yet been calculated. The tax auditor is of the opinion that even after the fact, a shift of the tax liability to the Dutch customer according to §13b USTG is only possible if the service to the Dutch customer had also taken place on a Dutch construction site. However, since the construction site is located in Germany, this would not be possible from the outset. I cannot find anything on this in the literature. The Dutch customer has already provided confirmation that they have properly declared the turnover in the Netherlands, but this is also not sufficient for the tax auditor. So far, I have been arguing as attached, but I am also unable to make progress if the shift of the tax liability is only possible on a Dutch construction site. The tax auditor is now requesting the deduction and remittance of VAT to the tax office from the previous net revenue. Thank you for your help.
Dear enquirer,
Thank you for your inquiry, which I would like to answer based on your information and in the context of your commitment in a first consultation as follows:
First of all: The attachment you mentioned was not enclosed.
Your domestic client provided a construction service in Germany. However, the tax liability in accordance with § 13b paragraph 1 no. 4 of the German VAT Act in conjunction with § 13b paragraph 2 sentence 4 of the German VAT Act only applies if the recipient of the service is also active in the construction industry. If this is not the case, the provision regarding tax liability does not apply. If the construction service was carried out in Germany in connection with a building, the turnover would be taxable and subject to VAT in Germany according to § 3a paragraph 2 no. 1 of the German VAT Act, and the VAT would have to be deducted from the consideration.
If the recipient of the service is indeed active in the construction industry, then the conditions for the tax liability lie with your client.
If the VAT liability is shifted to the recipient of the service in accordance with § 13b of the German VAT Act, then in addition to the general provisions on invoicing in accordance with § 14 of the German VAT Act, § 14a paragraph 5 of the German VAT Act must also be observed: A reference to the tax liability under § 13b of the German VAT Act must then appear.
If the reference is missing, as in your case, and there is indeed a tax liability, this absence does not release the recipient of the service from the tax liability under § 13b paragraph 2 of the German VAT Act (cf. BMF dated 5.12.2001, IV B 1 - S 7279 - 5/01, BStB1 I 2001, 1013). The reference to the tax liability of the invoice recipient is not a substantive legal requirement for the transfer of tax liability. In this context, I refer to the VAT commentary Vogel / Schwarz § 14a of the German VAT Act, para. 31.
Your client should amend the invoice with a reference to the VAT liability of the recipient of the service.
Yours sincerely,
Ulrich Stiller
Tax advisor/Dipl. Betriebswirt
PS:
I was able to open your attachment afterwards.
In principle, your explanations are correct if the conditions for tax liability are met. It is also correct that the recipient of the service does not have to be resident in Germany.
You would need to lodge an objection against the VAT assessment and request a suspension of the enforcement in respect of the disputed tax amount.
