Temporary VAT reduction by 3% until 31.12.2020

2020-09-13 13:22:16

Just a dumb question in between: What mistakes can you think of when calculating the VAT savings incorrectly?

Background: our general contractor apparently did not calculate with price/119*116 and therefore does not arrive at -2.52%. The general contractor calculates with a reduction of -2.91%. I mean, if by chance the VAT reduction should be extended until 2021, I can save a bit again because he is too stupid to calculate. But I am interested in which calculation error leads to the wrong result.

How was the reduction communicated? Is payment made by deduction? Then in my understanding only the final invoice counts anyway, which might then be correct.

2020-09-13 13:38:36

Just a stupid question in between: What mistakes can you actually think of when it comes to incorrectly calculating the VAT savings?

Background: our general contractor apparently did not calculate with price/119*116 and therefore does not arrive at -2.52%. The general contractor calculates with a reduction of -2.91%. I mean, if by chance the VAT reduction should be extended until 2021, I could save a bit more because he is too stupid to calculate. But I’m interested in what calculation error leads to the wrong result.

Apart from the fact that this is ethically questionable (as Tolentino already said), I also don't believe you can get away with this "saving." Most construction companies will have tax advisors. And they will definitely notice it.

2020-09-14 07:34:05

Most construction companies will have tax advisors. And they will definitely notice that.

But who has no idea what was contractually agreed upon, how the individual prices are composed, but only checks gross, net, and VAT for plausibility and whether the paid installments match the installments in the final invoice. If there is no error there, they might never find out.

2020-10-04 23:17:02

Hello dear forum,
from a silent guest reader I am becoming a registered member today because the topic of VAT reduction is becoming a special case for me and why do you ask?! Here is my timeline:

October 2019 - Contract for work with fixed price sum of €365,000 (The contract states: The statutory VAT of 19% is included in the prices.)
June 2020 - Acceptance of the house with several defects in various trades (remaining work required, i.e. performance not completed)
***VAT reduction as of 01.07.2020***
July 2020 - Completion of all remaining work (defects in the trades were repaired)
September 2020 - Final invoice amounting to 5% of the €365,000 (invoice was issued with 19% VAT despite the VAT reduction!)

Question: Am I now allowed to pay 16% VAT on the €365,000 because the final invoice was only issued in September, or does the VAT reduction only apply to the final invoice because acceptance took place before 01.07.2020?

A payment plan with 10 installments was agreed with the construction company, in which payment had to be made after completion of individual construction phases (floor slab poured, ground floor ceiling poured, etc.). Except for the last installment, all payments were made before 01.07.2020. My hope for a refund of the "overpaid" VAT rests entirely on the final invoice after the VAT reduction...

Many thanks in advance to this forum and the members, you have saved me time, nerves and money during the house construction over the past months.

Best regards
Andy from Monnem

do you already have any news? I could detect similarities to my case in your post #204?

2020-10-05 00:04:30

Hello dear forum,
from a silent guest reader today becomes a registered member, because for me the topic of VAT reduction becomes a special case and why do you ask?! Here is my timeline:

October 2019 - Contract for work with fixed price sum of €365,000 (The contract states: The statutory VAT of 19% is included in the prices.)
June 2020 - Acceptance of the house with several defects in various trades (remaining work required, i.e. service provision not completed)
***VAT reduction as of 01.07.2020***
July 2020 - Completion of all remaining work (defects in the trades were fixed)
September 2020 - Final invoice amounting to 5% of the €365,000 (invoice was issued with 19% VAT despite the VAT reduction!)

Question: Am I now allowed to pay 16% VAT on the €365,000 because the final invoice was only issued in September or does the VAT reduction only apply to the final invoice because acceptance took place before 01.07.2020?

A payment plan with 10 installments was agreed with the construction company, where payment had to be made after completion of individual construction phases (floor slab poured, ground floor ceiling poured, etc.). Except for the last installment, everything was paid before 01.07.2020. My hope for reimbursement of the "overpaid" VAT lies entirely with the final invoice after the VAT reduction...

Many thanks in advance to this forum and its members, you have saved me so much time, nerves, and money during the house construction over the past months.

Best regards
Andy from Monnem

are there any updates from you yet? I could detect similarities to my case in your post #204?

I assume it depends here on the detail "acceptance," as with this declaration you confirm the service provision. Did you refuse acceptance in June and only declare it after completion of the remaining work?

Your post reads as if acceptance was declared in June. I therefore assume that the company handled this correctly. However, you should probably seek expert advice.

2020-10-05 00:26:50

For me, it also reads as if the acceptance took place beforehand and afterwards only a complaint about defects was made. Could be difficult.

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Temporary VAT reduction by 3% until 31.12.2020

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