Germany tax: Draft bill on adoption of EU directives and other regulations
Germany's Federal Ministry of Finance (BMF) has released a draft tax law that would implement certain EU directives and other rules into German law. In addition to a number of VAT changes, the proposed new provisions mainly affect individual taxpayers. The changes include the following:
- Accelerated depreciation of buildings in EU/EEA countries would be allowed in all open cases (the accelerated depreciation of buildings is generally only allowed for acquisitions or the construction of new buildings based on an application for a construction permit or purchase agreement before 1 January 2022).
- Deductions would be granted for contributions/donations to charitable organizations in EU/EEA countries for German tax purposes. The new rule applies to all open cases. From 2010, however, deductions would be allowed only if the recipient organization has a link to Germany (e.g. because it supports German individuals).
- A VAT exemption would be provided for postal services.
- For all services subject to the reverse charge system, VAT would be incurred at the time services are rendered (applicable from 1 July 2021).
- The reporting period for the European Sales List (ESL) would change from a quarterly to a monthly basis (applicable from 1 July 2021). The ESL would have to be filed by the 25th day after the end of the month (currently by the 10th day after the end of a quarter).
- A VAT identification number would be granted to all entrepreneurs upon request (applicable from 1 January 2022).
The proposed tax law may still be subject to change during the parliamentary approval process.