Client in Denmark. Is the survey of VAT mandatory?
August 27, 2010 | 30,00 EUR | answered by Oliver Burchardt
Hello.
Our logistics company is based in Germany, with our main client (also in logistics) based in Denmark. They request to waive the collection of VAT.
Invoices have been issued on a net basis via credit note without the collection of VAT for the past year.
Is this legal?
What does the pending decision of the European Court of Justice mean?
Recently, a tax audit conducted by the Eutin tax office resulted in a significant additional tax assessment. A timely appeal has been filed, however, any accumulating input tax claims are being offset against this assessment.
Question as above.
Thank you.
Peter Bo.
Dear inquirer,
Thank you for your inquiry, which I would like to answer within the framework of the facts described and taking into account your input.
In principle, the question of whether VAT is to be levied on sales depends on where the place of the service is located. The regulations of §§ 3a ff. UStG 2009 are relevant here. I assume that as a logistics company, you do not make deliveries, but only provide other services. Since you mention a tax audit, I will only focus on the regulations up to December 31, 2009. Extensive changes for the place of the service will apply from January 1, 2010.
For you as a logistics provider, the regulations of § 3b para. 3 UStG 2009 apply. Since it can be assumed that your client is a business within the meaning of the UStG, the turnover is deemed to be carried out in Germany and therefore taxable. In principle, you are obliged to charge VAT on this turnover and also separately show it on the invoice.
However, § 4 No. 3 UStG grants a tax exemption for cross-border transport, provided certain conditions are met. If this is the case, no VAT is to be charged.
Based on the facts described, it seems to me at first glance that there is no tax liability. However, this assessment can only be made provisionally based on the statutory regulations. In individual cases (especially if the conditions of § 4 No. 3 UStG are not met), a different tax assessment is necessary.
I recommend that you seek detailed tax advice on this matter. In particular, an evaluation of the audit report must be carried out.
You should also seek advice on the impact of the changes to the UStG from January 1, 2010 on your company.
I hope this has given you an initial overview of the legal situation.
Kind regards,
Oliver Burchardt
