On May 12 2017, the law to decrease administrative burdens
(Bürokratieentlastungsgesetz II) introduced an increase in
the threshold for so-called invoices for small amounts from
€150 ($165) to €250 (gross). This has been done with
a view to simplifying, in particular, cash transactions, the
trade in everyday consumer goods and billing through automatic
machines.
Simplification for input VAT deduction from invoices for
small amounts
The provisions on invoices for small amounts pursuant to
section 33 of the German VAT Implementation Code (UStDV)
contribute to simplifying input VAT deduction in daily
business. According to section 15 of German VAT Act, input VAT
can only be deducted where the recipient is in receipt of an
invoice that meets the standard invoice requirements of section
14 paragraph 4 of the German VAT Act. As regards to input VAT
deduction from so-called invoices for small amounts, the
provisions of section 33 of the UStDV provides for only very
basic requirements concerning the information stated in an
invoice. Contrary to the information provided on regular
invoices in accordance with section 14 paragraph 4 of the
German VAT Act, it is, in particular, not necessary to state
the recipient and the separate VAT amount. The provisions on
small amounts do not apply in cases of distance selling,
intra-Community supplies of goods or, as regards the
reverse-charge mechanism.
Retroactive effect
The amendments have retroactive effect from January 1 2017.
However, taxable persons who have received invoices for the
amount of €150-€250 (gross) since this date can claim
input VAT deduction even if the invoices merely contain the
information of section 33 of the UStDV.
Practical problems for application remain
The practical problems associated with the application of
the new law continue to exist. Information, which is not
required but yet stated in invoices, might jeopardise the input
VAT deduction, in particular, incomplete or incorrect
information concerning the recipient appearing in the invoice.
The fiscal authorities may basically deny input VAT deduction
on the grounds that the invoice does not meet the requirements
of section 33 of the UStDV. This then leads to the paradoxical
conclusion that where the address field is empty input VAT can
be deducted. However, where the address field is incompletely
or incorrectly filled out, the deduction will be denied.
Recommendations
Invoices for small amounts should merely contain the invoice
details required in accordance with section 33 of the UStDV.
Any additional information carries with it the risk of being
incomplete or incorrect and may consequently jeopardise the
recipient’s input VAT deduction.
This article was
written by Dr Matthias Oldiges, lawyer at Küffner Maunz
Langer Zugmaier in Munich.