Reduced value-added tax until the end of 2020. Procedure for invoices?

I have to correct myself - this does not work with interim invoices and final invoices, and are correct. Only individual invoices work.

Hi,

we also have the situation here that we pay a contract for work with installment payments and our construction will only be completed in Q1 2021.

Is the following procedure generally possible – at least that’s how I understood it with my tax advisor? According to the contractor’s tax advisor, the entire contract would have to be terminated and redone.

- For the services rendered from 01.07. to 31.12., a partial acceptance is made through our building savings contract
- Furthermore, another agreement will be appended to our contract for work

If yes, of course, further questions will arise.

Thanks & best regards

According to the contractor's tax advisor, the entire contract would have to be dissolved and redone.

However, the tax office will only recognize this if there are valid reasons for the dissolution and re-entry into the contract. If the only understandable reason is the tax savings, this will be considered abusive arrangement and 19% VAT will still be payable on the entire project.

So a contract termination would also not be my preferred way. Unfortunately, one only finds general scenarios about this, but little detailed information - the article from [Bauherren-Schutzbund] also assumes a legal implementation. If anything, we would have wanted to carry out the acceptance of the partial service including additional agreements.

If we wanted to carry out the acceptance of the partial service including additional agreements

The same applies as for the termination. For the subsequent change, a reasonable and comprehensible reason must be provided. The desire to save taxes is unfortunately not sufficient for this. These are the same principles as with the last VAT change. There is now also a more than detailed BMF letter on the topic.

As I understand it, you have to multiply the total gross price (calculated with 19%) by 0.81 to get a net amount and then multiply it by 1.16, right?

Rather the total gross price divided by 1.19 and multiplied by 1.16