Out-Law Legal Update | 24 Jan 2018 | 2:26 pm | 1 min. read
This means that numerous additional services provided in connection with German real estate will in future by subject to German VAT at a rate of 19%.
According to a letter published by BMF, the following services will now be classed as "services relating to real estate" under section 3(a) (3) No. 1 of the German Sales Tax Law (UStG):
The determination of 'place of service' as the location of the land plot is to be applied even if the underlying transaction leading to a legal change in relation to the land plot does not ultimately take place.
Services which are not closely related to a specific property, or for which the property is not a central and indispensable part, are not subject to the special provision of services set out in section 3a (3) No. 1 UStG. In our experience, unrelated services include:
The BMF letter is applicable to all open cases.