Section 5: Taxation

§ 17 Change in the taxable amount

(1) If the taxable amount for a taxable transaction, within the meaning of § 1 paragraph 1 number 1, has changed, the taxable person who executed this transaction must adjust the respective VAT amount due. The deduction of input VAT must also be adjusted by the taxable person, with respect to whom this transaction was executed. This shall not apply, in the case where the taxable person does not receive an economic benefit as a result of the change in the taxable amount. If, in these cases, another taxable person receives an economic benefit as a result of the change in the taxable amount, this taxable person must adjust his input VAT deduction. Sentences 1 to 4 shall apply accordingly for the cases referred to in § 1 paragraph 1 number 5 and § 13b. Where, within the context of a supply chain, the supplier grants price reductions or price reimbursements not directly to his customer but to another recipient in the supply chain a reduction of the taxable base, as defined in sentence 1, is only given when the supply purchased by that recipient within the supply chain is subject to VAT in Germany. The adjustment of the input VAT deduction need not be made if a third taxable person pays the tax office the amount of VAT attributable to the reduction in the consideration; in this case, the third taxable person shall be liable for the VAT. The adjustments pursuant to sentences 1 and 2 are to be made for the tax period in which the change in the taxable amount has arisen. The adjustment pursuant to sentence 4 is to be made for the tax period in which the other taxable person receives an economic benefit.

(2) Paragraph 1 shall apply accordingly, if

1. the agreed consideration for a taxable supply of goods and services or a taxable intra-Community acquisition has become uncollectible. In the event that the consideration is subsequently received, the VAT amount and the input VAT deduction are to be readjusted;

2. consideration is paid for an agreed supply of goods or services, even though the supply was not executed;

3. a taxable supply of goods or services or a taxable intra-Community acquisition has been cancelled;

4. the customer provides proof in accordance with § 3d sentence 2;

5. expenses are incurred within the meaning of § 15 paragraph 1a.

(3) If the import VAT, which has been deducted as input VAT, has been reduced, waived or reimbursed, the taxable person must adjust the input VAT deduction accordingly. Paragraph 1 sentence 8 shall apply accordingly.

(4) If the consideration for the supply of goods or services, which are taxed differently, has collectively changed for a specific period (e.g. annual rebates, annual refunds), the taxable person must issue the recipient with a statement which shows how the change in consideration is attributed to the differently taxed transactions.