Tax law. The deduction of input VAT on basis of a construction work invoice containing an abstract service description of the executed work can be sufficient if it is apparent to which specific construction project the invoice relates.
Judgement of the Federal Fiscal Court (BFH) dated 15 October 2019, ref. V R 29/19 (formerly V R 44/16)
A service company in the industrial sector claimed input VAT from construction work invoices. The financial authorities, however, denied the input VAT deduction as the invoice details were allegedly not specific enough. On the one hand the financial authorities presumed a lack of information re the dimensions of the constructed object. On the other hand the invoice presumably did not include the exact execution date of the construction work. The company, however, stated that the invoice details were sufficient as the construction project could be verified from the other details of the invoices and the date of the construction work was indicated by the date the invoice had been issued. The Federal Fiscal Court confirmed the company’s opinion.
Section 14 of the German VAT Code (UStG) sets out the invoice details required for a deduction of input VAT. These details are mandatory in order to put the tax authorities in a position to identify and check the invoiced services properly. According to the Federal Fiscal Court it shall, however, be sufficient if the details enable the tax authorities to easily identify the invoiced services. Therefore, an exhaustive description of the invoiced services was not deemed necessary. In the case at hand, these requirements were met as the overall invoices gave enough details about the specific building project and the place of its execution. With regard to the date of the executed services, the Federal Fiscal Court continues its previous case law (Ref. V R 18/17). If the invoice is being issued immediately after the building has been finalized and approved, as is customary in the building industry, the date of the execution of the construction work corresponds to the date of the invoice and, therefore, is sufficient, unless apparently indicated otherwise.
What is to be done?
The Federal Fiscal Court confirms that service descriptions must indeed be specified in the relevant invoice and that it is not sufficient to merely state a service category. Therefore, the invoice should always set out the required additional information. Please note, that even the calendar month in which the service was rendered can be a sufficient execution date. Therefore, the Federal Court of Finance allows invoices re construction works to be issued without a specific execution date, if it can be assumed that the work was performed in the month in which the invoice was issued. However, in order to avoid risks we recommend to always set out a specific execution date or at least the addition “date of execution equals date of issued invoice”.
Lawyer and tax consultant Isabel Tannenberg of KUCERA.
KUCERA advised Nuveen Real Estate on the tax aspects of the purchase of a retail park in Bopfingen/Baden Württemberg. The acquisition took place on behalf of an institutional investor for an open ended real estate fund. The approx. 7,400 m² rental area is leased on a long-term basis to the food supplier „Rewe“ and „dm drogeriemarkt“. In addition, the object provides gastronomy and office spaces as well as approx. 170 free parking spaces. Read more…
Nuveen Real Estate was advised by KUCERA partners Rolf Krauß and Isabel Tannenberg (both tax).
KUCERA advised a special fund of Nuveen Real Estate on the sale of the “Olymp” portfolio to the special fund “Redos Einzelhandel Deutschland II”. The rental space of the portfolio comprises a total of 141,000 m² and consists of eleven specialist retail and hybrid centres. These are located in West Germany and Berlin, such as the Durlach Center in Karlsruhe or the Allende Center in Berlin Köpenick. Anchor tenants include Kaufland, real, EDEKA, REWE, Penny, Rossmann and Saturn. Read more…
Responsible were KUCERA partners Rolf Krauß and Isabel Tannenberg together with associate Leila Idrissi (all Taxation).
Isabel Tannenberg joined KUCERA as lawyer in the Real Estate Taxation department in 2011. In 2015 she was admitted as tax consultant.
Her practice focuses on tax and corporate law advise of national and international investors, open-end and closed-end real estate funds, insurance companies and project developers in connection with real estate transactions and structuring. In addition, she gives tax advise to her clients on lease agreements and supports them in and out of court.
Isabel Tannenberg, KUCERA strengthens the field of real estate tax law with a
home-grown partner, in particular with regard to value added tax, real estate
transfer tax and real estate tax, and thereby takes one more step towards a new
generation of partners.
KUCERA has advised TH Real Estate on the purchase of the “ACTIV-Arkaden” in Horb am Neckar. On behalf of an institutional investor TH Real Estate has acquired the retail park which opened in October 2017.
The “ACTIV-Arkaden” are within walking distance of the city center and centrally located at the station square in front of the newly designed bus station. The approx. 6,000 sqm of total rental space are long-term leased to the food retailer Rewe and to the drugstore Müller.
Rolf Krauss (Partner – Real Estate Taxation) and Isabel Tannenberg (Associate – Real Estate Taxation) were responsible for tax advice. Read more…
KUCERA advised TH Real Estate on the purchase of a retail park in Oppenheim. TH Real Estate has acquired this for an institutional investor as part of an asset deal. The property was opened in October 2017 and offers through the anchor tenant Kaufland, among other things, 400 car parking spaces and an e-gas station.
Responsible for the tax advice were Rolf Krauss (Partner – Real Estate Taxation) and Isabel Tannenberg (Associate – Real Estate Taxation). Read more…
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