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Intra-community deliveries are exempt from VAT under sec. 4 no. 1 (b) UStG. The legal definition of an intra-community delivery requires among other things that the transaction constitute an intra-community acquisition and hence be subject to VAT for the recipient in another EU Member State (sec. 6a par. 1 no. 3 UStG).
A public letter recently issued by the Federal Ministry of Finance dated 29 March 1996 clarifies the supplier's responsibility to prove that the above requirement has been met: "The requirement ... is fulfilled when the acquirer of the goods has provided the entrepreneur with a VAT ID number issued to him by another Member State. The recipient thereby signifies his intention to acquire the goods tax free [in Germany] because the acquisition is subject to the taxation provisions of the other Member State.... The entrepreneur proves fulfilment of the requirement of sec. 6a par. 1 no. 3 UStG by recording the recipient's VAT ID number. Production of additional evidence cannot be required from the entrepreneur. He is in particular not required to prove that the acquirer of the goods has subjected them to acquisition taxation or paid the acquisition tax in fact."
It should be noted, however, that a taxpayer has not complied with the conditions of the public letter if the ID number is incorrect, e.g. because his buyer misinformed him. A second public letter issued on 28 March 1996 by the Ministry of Finance of the State of Hessen explains that in such cases the entrepreneur has the opportunity of correcting the mistake by reporting the proper number. If he is unable to do so, sec. 6a par. 4 UStG is to apply by analogy. This provision states that the supplier's delivery can be treated as tax exempt even though the legal requirements were not fulfilled if the supplier's failure to charge VAT was due to erroneous information supplied by the purchaser. The protection extended to the good faith supplier is, however, subject to the requirement that a reasonable businessman would not have discovered the mistake.
Since it remains unclear what level of care suppliers will be held to, we still advise making use of the verification possibilities offered by the German Federal Finance Office (Bundesamt fuer Finanzen) in Saarlouis (see Art. no. 7 = German News no. 4/95 at page 8).
Disclaimer and Copyright
This article treats the subjects covered in condensed form. It is intended to provide a general guide to the subject matter and should not be relied on as a basis for business decisions. Specialist advice must be sought with respect to your individual circumstances. We in particular insist that the tax law and other sources on which the article is based be consulted in the original, whether or not such sources are named in the article. Please note as well that later versions of this article or other articles on related topics may have since appeared on this database or elsewhere and should also be searched for and consulted. While our articles are carefully reviewed, we can accept no responsibility in the event of any inaccuracy or omission. Please note the date of each article and that subsequent related developments are not necessarily reported on in later articles. Any claims nevertheless raised on the basis of this article are subject to German substantive law and, to the extent permissible thereunder, to the exclusive jurisdiction of the courts in Frankfurt am Main, Germany. This article is the intellectual property of KPMG Deutsche Treuhand-Gesellschaft AG (KPMG Germany). Distribution to third persons is prohibited without our express written consent in advance.
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