What are the tax exemptions for 2019
Tax exemptions according to § 4 UStG
Table of Contents
1 Tax exemptions for deliveries and other services (§ 4 UStG)
1.1 Fake tax exemptions
1.2 Real tax exemptions
2 fake tax exemptions
3 Real Tax Exemptions
4 waiver of false tax exemptions (option to tax liability)
5 Sales tax exemption can have a tax-increasing effect
6 Narrow interpretation of the exemptions
7 Tax exemption for paid sales does not necessarily lead to the exemption of free value taxes
8 Obligations to record (Section 22 Paragraph 2 No. 1, No. 2 UStG)
1. Tax exemptions for deliveries and other services (§ 4 UStG)
Taxable sales, i.e. sales that are carried out in Germany and are therefore generally subject to the German UStG, only result in sales taxation if the sales tax law does not apply, i.e. if they are not only taxable but, in the absence of a sales tax exemption, are also subject to sales tax . The tax exemptions are to be differentiated into those that
exclude input tax deduction (spurious tax exemptions) or
do not exclude input tax deduction (real tax exemptions).
1.1. Fake tax exemptions
According to Section 15 (2) Sentence 1 No. 1 UStG, an entrepreneur cannot claim VAT from input services that he uses to carry out his own tax-free sales as input tax (input tax exclusion). This leads to the fact that on the one hand no sales tax is incurred for the sales carried out by him, on the other hand the sales tax previously incurred at the previous economic levels is retained due to the refusal to deduct input tax, i.e. there is no full sales tax relief in the overall view. In this respect, one speaks of "fake" tax exemptions.
A blind bicycle dealer (B) who runs his bicycle shop with an employee buys an e-bike from the manufacturer for € 3,000 plus € 570 sales tax, which he would like to resell to a private customer (P) with a surcharge of € 600.
The delivery of B's e-bike to private customer P is tax-free according to § 4 No. 19 letter a UStG, since the supplier is blind and only employs one worker in his business. The sales tax for the purchase of the e-bike in the amount of However, B cannot claim € 570 as input tax in accordance with Section 15 (2) Sentence 1 No. 1 UStG. B must therefore include this sales tax in its sales price so that it remains as a price component. B therefore determines its selling price as follows: 3 570 € purchase price + 600 € gross surcharge = 4 170 € (gross = net).
Sales that are tax-free must include sales tax if the entrepreneur concerned is legally denied input tax deduction on input sales. In these cases, the tax exemption only applies to the added value of the exempt entrepreneur (Weimann in Weimann / Lang, 4th edition 2015, § 4 margin no. 1 f.).
1.2. Real tax exemptions
According to § 15 Paragraph 3 No. 1 Letter a UStG, the above-mentioned exclusion of input tax deduction according to § 15 Paragraph 2 No. 1 UStG does not apply to tax exemptions according to § 4 No. 1 to 7 UStG, § 25 Paragraph 2 UStG and § 26 Abs. 5 UStG (back exclusion). In accordance with Section 15 (3) No. 1 (b) of the UStG, this also applies to tax-free sales in accordance with Section 4 (8) (a) to (g), Section 4 (10) and Section 4 (11) of the UStG, if the The recipient of the service is based in the third country or these sales relate directly to items that are exported to the third country.
Since the input services of the entrepreneur in these cases are relieved of previous sales tax due to the possible input tax deduction due to the exclusion in Section 15 (3) No. 1 UStG and at the same time no further sales tax is incurred for the output services of the entrepreneur to third parties, full sales tax relief occurs here a. These tax exemptions are therefore also referred to as “real tax exemptions”.
A bicycle wholesaler (F) buys an e-bike from a manufacturer in Germany for € 3,000 plus € 570 sales tax, which he would like to resell to bicycle retailer B from Belgium with a surcharge of € 600. The requirements of § 6a UStG are met.
The delivery of the e-bike from bicycle wholesaler F to bicycle retailer B from Belgium is exempt from sales tax as an intra-community delivery according to § 4 No. 1 letter b UStG in conjunction with § 6a UStG. Since F due to the back exclusion in § 15 Paragraph 3 No. 1 Letter a UStG nevertheless the input tax deduction from the purchase of the e-bike in the amount of If you can claim 570 €, there is a complete reduction in sales tax when viewed as a whole. From the point of view of the F, the sales tax from the purchase of the e-bike is therefore not a price component and therefore no longer has to be factored into the sales price. B therefore determines its selling price as follows: € 3,000 purchase price + € 600 gross premium = € 3,600.
2. Fake tax exemptions
The main spurious tax exemptions relate to:
certain financial transactions (§ 4 No. 8 UStG)
Case law on § 4 No. 8 Letter c UStG
In the judgment of 5.9.2019, V R 57/17 (LEXinform 0951619), the BFH decided that the sale of endowment life insurance policies on the secondary market as sales in the business with receivables according to § 4 No. 8 letter c UStG is exempt from sales tax.
The supreme court decision was based on the following facts: The plaintiff is a stock corporation (AG), the object of which is the acquisition and subsequent sale of endowment insurance policies. The AG acquired their endowment life insurances from private policyholders at a purchase price that was lower than the sum of the insurance premiums paid, but higher than the surrender value of the respective insurance. The plaintiff then changed the insurance contracts so that they continued to run as uniformly as possible for the remaining term and terminated insurance components such as additional insurance that were irrelevant for the expiry benefit. It also switched the contracts to either pay annually or, if possible, left them free of charge. Finally, it sold the rights to the modified endowment insurance to fund companies and treated these services as tax-free sales in the business with receivables according to § 4 No. 8 letter c UStG.
In contrast, the tax office and the tax court were of the opinion that the sale of endowment life insurances on the secondary market consisted of uniform services that were subject to sales tax on the basis of the purchase price paid by the funds. The transfer of the claim does not represent the main service, but is only an essential, but not the only characteristic part of the main service, which consists of several parts.
In the subsequent lawsuit, the BFH came to the conclusion - contrary to the opinion of the FG - that the transfer of the future monetary claim represents the main service, while the transfer of the other rights and obligations from the endowment insurance as ancillary service shares the fate of the main service, in particular with regard to the VAT exemption. The BFH first made it clear that in the event of a dispute, there would be a uniform service in the form of main and ancillary services. Since the interest of the fund as a recipient of services is directed solely to the acquisition of a capital claim, the other rights and obligations only serve as ancillary service to optimize the acquired capital investment. The protection of the insured risk is of no importance for the funds as acquirers, since for them only the return expectations from the capital investment are relevant. The main service thus lies in the transfer of the claim and, as a business with claims, falls under the tax exemption according to § 4 No. 8 letter c UStG. The assignment of the entitlement to the future maturity service forms an independent whole and thus fulfills the specific and essential functions of a business with claims, because the transfer brings about a change in the legal and financial situation, at least with regard to the subscription entitlement.
Case law on § 4 No. 8 Letter d UStG
In its judgment of November 13, 2019 (V R 30/19, BFH Az .: 0952484), the BFH rejected the applicability of the tax exemption according to § 4 No. 8 letter d UStG to the disputed sales of a financial services company. The service company in question set up these ATMs for a bank that operates ATMs, waited them, filled them with cash, equipped them with hardware and software for reading the money card data and also forwarded authorization requests for cash withdrawals to the bank, which the used cash card. In addition, the service company made the desired cash payout and also generated a data record of the respective payouts.
With its ruling, the BFH contradicted the decision of the FG Rhineland-Palatinate of October 23, 2014, 6 K 1465/12 (EFG 2015, 588), which, contrary to the objection decision of the competent FA, considered the sales in question to be tax-free according to § 4 No. 8 Letter d UStG. As part of the proceedings, the BFH's decision-making Senate had sent a preliminary ruling request to the ECJ, to which the ECJ replied with the ECJ judgment "Cardpoint" of October 3, 2019 (case C-42/18) that Art. 13 Part B lit. d No. 3 of the sixth VAT Directive should be interpreted to the effect that the above-mentioned services provided by financial service companies for ATMs are not sales in payment transactions that are exempt from VAT within the meaning of the aforementioned provision of the VAT Directive. With the cited ruling of November 13, 2019, the BFH now agreed with the legal opinion of the European Court of Justice and assessed the services of the financial services company as taxable sales.
Case law on § 4 No. 8 Letter h UStG
With regard to the tax exemption according to § 4 No. 8 letter h UStG, the BFH has decided that the administrative services of company pension schemes are not tax-free according to § 4 No. 8 letter h UStG, but are subject to sales tax if the employees do not bear any investment risk and the employer is legally obliged to pay the pension system to his employees (BFH judgment of July 26, 2017, XI R 22/15, LEXinform 0950928).
In a further ruling (BFH ruling of November 22, 2018, VR 21/17, LEXinform 0951406), which was issued on Section 4 No. 8 letter h UStG in its old version, the BFH decided that the The existing reference to the InvG only relates to the management of domestic investment funds, but not to foreign investment funds that were only subject to the InvG with regard to the distribution of units.
Sale of land (Section 4 No. 9 Letter a UStG),
certain gaming revenues (§ 4 No. 9 letter b UStG),
The BFH ruled on December 11th, 2019, XI R 13/18, that operators of slot machines cannot invoke the tax exemption under Union law, and thus its previous judgment of November 10th, 2010, XI R 79/07, Federal Tax Gazette II 2011, 311 confirmed.
In the event of a decision, a machine operator operated slot machines that are technically set up in accordance with statutory regulations so that a certain percentage of the stakes are paid out to the players. Due to the random nature of the game, the operator himself does not have a game-related profit, but an average profit in terms of time.
In its above-mentioned decision, the BFH once again made it clear that sales from the operation of slot machines with the possibility of winning are taxable and subject to tax, as the EUGH has already confirmed in its case law. The part of the stakes that is paid out to the players as winnings is not included in the assessment base. The reason given by the BFH is that the organization of games of chance is a controllable service, regardless of the random dependency of individual game processes. The provision of the machines and the granting of a profit opportunity establish a paid service in which the payment only consists of that part of the consideration that the machine operator can dispose of himself (see ECJ of 5.5.1994, C-38/93). In the opinion of the ECJ, the uncertainty with regard to the profit does not exclude the existence of a turnover, but is an essential part of the entertainment aimed at by the machine users. The operator grants the player a chance to win and in return accepts the risk of having to pay out the winnings.
Despite the random dependency as to whether the player is paid a win or not, the fee in the form of the net cash receipts from the games of all players is subject to sales tax, as the machines are designed in such a way that the operator has a predictable return. His income is therefore not to be seen as a profit, but rather as a fee for his service. The part of the winnings paid out to the players is not part of the tax base for sales tax (ECJ of October 24, 2013, C-440/12, "Metropol Spielstätten" HFR 2013, 1166, BFH of December 14, 2015, XI B 113/14, BFH / NV 2016, 599).
Even the argument that it is not possible for the machine operator to issue a proper invoice to each individual player does not, in the opinion of the ECJ, mean that the turnover is not subject to sales tax. The possession or issuing of an invoice is not an essential feature for the collection of sales tax (see ECJ of June 26, 1997, C-370/85).
Insurance sales (§ 4 No. 10 UStG),
Sales of insurance and building society representatives (§ 4 No. 11 UStG),
Universal postal services in accordance with Article 3 (4) of Directive 97/67 / EC (Section 4 No. 11b UStG),
The regulation of § 4 No. 11b UStG exempts universal services according to the above postal directive (Art. 3 Para. 4 of Directive 97/67 / EC) from sales tax, provided that the entrepreneur providing the service reports to the Federal Central Tax Office (BZSt) has committed to offer all universal services or at least a part of these services nationwide throughout the Federal Republic of Germany. In order to claim the tax exemption, a corresponding certificate from the BZSt is formally required according to § 4 No. 11b sentence 2 UStG.
For this purpose, the BFH ruled on 6 February 2020 (BFH VR 36/19, LEXinform 0952555) that the formal delivery of documents according to public law provisions as a universal postal service in accordance with Art. 3 Para. 4 of Directive 97/67 / EC is to be regarded as a service provided by »public postal facilities« under Art. 132 (1) (a) of the VAT Directive, which is exempt from sales tax. The Stpfl. In the opinion of the court, irrespective of a corresponding national regulation, Article 132 (1) (a) of the VAT Directive can be invoked directly.
In a further - partly with the same content - judgment (BFH VR 37/19, LEXinform 0952559), which was also issued on February 6, 2020, the BFH also decided that entrepreneurs who offer universal postal services according to Art. 3 Para. 4 of the Directive 97/67 / EG, § 4 No. 11b UStG, have a right to the BZSt to issue a certificate according to § 4 No. 11b sentence 2 UStG. Accordingly, in the reference judgment, the BFH obliges the BZSt as the defendant and defendant to issue the certificate requested by the plaintiff in accordance with Section 4 No. 11b sentence 2 UStG.
Renting and leasing of real estate (§ 4 No. 12 UStG),
Services provided by apartment owners' associations (Section 4 No. 13 UStG),
medical treatment (§ 4 No. 14 UStG),
In its judgment of December 18, 2019 (XI R 23/19), the BFH decided that medical analyzes by a specialist in clinical chemistry and laboratory diagnostics not only according to Section 4 No. 14 letter b UStG, but also according to Section 4 No. 14 lit. a sentence 1 UStG can be tax-free and thus contradicts the administrative opinion in A 4.14.2 paragraph 2 sentence 1 UStAE. In this regard, the court further stated - also against the administrative opinion in A 4.14.1 Paragraph 1 and A 4.14.5 Paragraph 9 UStAE - that the existence of a relationship of trust between doctor and patient is not a prerequisite for tax exemption for an activity in the context of therapeutic treatment according to § 4 No. 14 letter a sentence 1 UStG. The court thus concurs with the opinion of the ECJ in its judgment of September 18, 2019 (C-700/17) on the request for a preliminary ruling from the BFH of October 11, 2017 (XI R 23/15).
Turnover of the statutory social insurance agencies, social assistance agencies, other agencies and war victims' pension and welfare agencies (Section 4 No. 15 UStG),
medical services (§ 4 No. 15a. UStG),
Integration benefits according to SGB II, benefits of active employment promotion according to SGB III and comparable benefits (§ 4 No. 15b. UStG),
Support and care services (§ 4 No. 16 UStG),
Deliveries of human organs, human blood and breast milk (Section 4 No. 17 Letter a UStG),
ambulance transport under certain conditions (§ 4 No. 17 letter b UStG),
Sales for the blind (§ 4 No. 19 UStG),
School and education sales (§ 4 No. 21-22 UStG),
Accommodation, meals for people up to the age of 27 for educational, training or advanced training purposes (§ 4 No. 23 UStG),
certain services of the public youth welfare agencies (§ 4 No. 25 UStG).
According to a current ruling by the BFH dated July 17, 2019, VR 27/17, a natural person who has been court-appointed as procedural counsel in accordance with Section 158 FamFG (law on the procedure in family matters and in matters of voluntary jurisdiction) can rely on the tax exemption under EU law in accordance with Art. 132 Para. 1 Letter g of the VAT Directive. The sales obtained from the services as legal advisor are therefore not subject to sales tax.
The plaintiff, who runs a freelance practice as a qualified psychologist, alternative practitioner for psychotherapy, mediator and systemic consultant, also provided services as procedural assistance according to § 158 FamFG, which the competent FA subject to sales tax in the year of the dispute (2013). The action brought before the Cologne Regional Court after unsuccessful objection proceedings was unsuccessful. According to its judgment of May 17, 2017, 9 K 3140/14 (EFG 2017, 1556, DStRE 2019, 1462), the plaintiff's services are neither covered by the national regulation in § 4 No. 25 UStG nor under the EU tax exemption under Art. 132 Paragraph 1 letter g of the VAT Directive.
In contrast to this, the sales of the plaintiff as a court-appointed legal adviser are in the opinion of the BFH (judgment of 17.7.2019, VR 27/17, LEXinform 0951440) according to Art. 132 para. 1 lit. Cologne repealed and the lawsuit was upheld. The sales are not tax-exempt according to § 4 No. 25 of the national UStG, since the plaintiff neither benefits of youth welfare according to § 2 para. 2 or § 2 para. 3 No. 6 in conjunction with § 50 SGB VIII (participation in proceedings before the family courts ) nor provide the services specified in Section 4 No. 25 Clause 3 Letters a to c UStG.
However, the Cologne District Court wrongly ruled out a VAT exemption under Article 132 (1) (g) of the VAT Directive. Contrary to the judgment of the FG, the plaintiff provides tax-privileged services and is also recognized as an institution with a social character.
voluntary work for legal entities under public law (§ 4 No. 26 UStG).
From § 15 Abs. 2 Nr. 1 UStG and the negative delimitation in § 15 Abs. 3 UStG it follows that for the mentioned sales the Input tax deduction excluded is.
3. Real tax exemptions
The main real tax exemptions concern:
Export deliveries (cross-border deliveries to a country outside the EU, §§ 4 No. 1 letter a, 6 UStG),
intra-community deliveries (cross-border deliveries to another EU country, §§ 4 No. 1 letter b, 6a UStG),
Transport services in and from countries outside the EU (§ 4 No. 3 UStG),
Services that are subject to the tax warehouse regulation (storage, warehouse deliveries, follow-up sales, § 4 No. 4a UStG),
Deliveries before import (§ 4 No. 4b UStG),
brokering exports and certain other related services (Section 4 No. 5 UStG),
Deliveries for shipping and aviation (§ 4 No. 2, § 8 UStG),
Services to NATO armed forces, to diplomatic missions based in the territory of another EU state and to intergovernmental institutions based in the area of another EU state (e.g. EC authorities, § 4 No. 7 UStG)
certain financial transactions (§ 4 No. 8 UStG).
From § 15 Abs. 2 Nr. 1, Abs. 3 UStG and the negative delimitation in § 15 Abs. 3 UStG it results that for the mentioned sales the Input tax deduction permitted is.
4. Waiver of false tax exemptions (option for tax liability)
Despite the advantages of a fake tax exemption (waiving the submission of sales tax returns and tax returns), this has an impact possibly disadvantageous always when high input sales would lead to an input tax surplus and thus to a claim for reimbursement. For some spurious tax exemptions, § 9 UStG therefore provides the possibility of a waiver, namely for
certain financial transactions (§ 4 No. 8 letters a to g UStG),
Sales subject to real estate transfer tax (e.g. sale of land, Section 4 No. 9 letter a UStG),
Renting and leasing of real estate (§ 4 No. 12 UStG),
Services of the homeowner associations (§ 4 No. 13 UStG),
Sales for the blind (§ 4 No. 19 UStG).
The waiver of the tax exemption is called option designated. It entails the tax liability of the turnover, with the standard tax rate of currently 19%. The options for renting and leasing properties have been changed several times in the past. Depending on how old the rented or leased building on the property is, different conditions are attached to the option (§§ 9 Paragraph 2, 27 Paragraph 2 UStG).
For details see → Waiver of tax exemptions according to § 9 UStG.
5. Sales tax exemption can have a tax-increasing effect
A sales tax exemption may have a tax-increasing effect if tax-free sales are carried out to a taxable entrepreneur. In this case, the turnover that the recipient achieves with the (taxable) output turnover is fully covered by turnover tax, while with the (unreal tax-free) input turnover the non-deductible input tax has already become a cost component (Heidner, op. Cit., Margin no. 5) .
On March 15, 2018, property developer BT is building a holiday home complex on Timmendorfer Strand. BT is selling one of the residential units to tour operator RV. He intends to rent the apartment within the meaning of Section 4 No. 12 Sentence 2 UStG for a short period of time (= rental period of less than six months, see Sect I 2009, 63 and ECJ judgment of February 12, 1998, case C-346/95, Blasi, UR 1998, 189). In the interests of the RV, it must be checked whether a tax-free or a taxable acquisition makes more sense from an economic point of view.
BT would have to calculate the sales price (VKP) as follows:
VKP with option
VKP without option
Production price of the BT net
240 000 €
240 000 €
+ non-deductible input tax
(19% of the cost price)
- not applicable -
45 600 €
+ Gross profit mark-up
40 000 €
40 000 €
= Net selling price
280 000 €
325 600 €
+ VAT (19%)
53 200 €
- not applicable -
333 200 €
325 600 €
Due to the possible input tax deduction, a taxable acquisition would make sense for RV if the gross profit surcharge of the BT remains unchanged.
The example shows that
if the seller for his part i. S. v. § 15 Abs. 1 UStG has to take into account deductible input tax amounts and
at the same time the sales tax invoiced to the purchaser would be deductible as input tax according to § 15 para. 2 ff. UStG,
the seller should opt for tax liability in the interest of the purchaser in the acquisition prior to the transfer of use according to § 9 UStG.
6. Narrow interpretation of the exemptions
According to the constant ruling of the European Court of Justice, the tax exemptions provided for in Art. 131 ff. Of the VAT Directive are autonomous terms under Community law that are intended to avoid the application of the value added tax system differently from Member State to Member State and for which the overall context of the common value added tax system must be observed (CJEU judgment of 8.3. 2001, case C-240/99, Försäkringsaktiebolag Skandia, UR 2001, 157, margin no. 23, with numerous cross-references to the own case; cf. also the reference by Heidner in Bunjes, 13. A. 2014, § 4 margin no . 5). The latter requires a narrow interpretation, since the tax exemptions represent exceptions to the general principle that every service that a taxpayer provides for consideration is subject to sales tax (ECJ, loc. Cit., Margin no. 32, with numerous cross-references to its own case law). These thoughts are ultimately also the basis of the Seeling case law of the ECJ.
7. Tax exemption for paid sales does not inevitably lead to exemption of free value taxes
To the Seeling case law. of the ECJ and the short-term end of the design options on January 1, 2011, see → Mixed-use buildings in income tax and sales tax.
8. Obligations to record (Section 22 Paragraph 2 No. 1, No. 2 UStG)
The entrepreneur's records must show how the agreed fees (Section 22 Paragraph 2 No. 1 UStG) or the fees or partial fees received (Section 22 Paragraph 2 No. 2 UStG) are distributed among the tax-free and taxable sales .
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