Section 5: Taxation

§ 18i Special taxation procedure for supplies of services provided by taxable persons not resident in a Member State

(1) A taxable person, not resident in a Member State, who carries out supplies of services as a taxable person after 30 June 2021 to recipients within the meaning of § 3a paragraph 5 sentence 1 in the Community territory, for which he is there liable for the VAT and where he is required to file VAT returns, must notify if he wishes to participate in the special taxation procedure, in accordance with title XII chapter 6 paragraph 2 of Council Directive 2006/112/EC as amended by Article 2 number 14 to 20 of Council Directive (EU) 2017/2455 of 5 December 2017 amending Directive 2006/112/EC and Directive 2009/132/EC, as regards certain value added tax obligations for supplies of services and distance sales of goods (OJ L 348 of 29 December 2017, page 7). The notification must be submitted by remote data transmission to the responsible tax authority of a Member State of the European Union using the official dataset; the responsible tax authority in Germany is the Federal Central Tax Office. The notification must be forthcoming prior to the commencement of the taxation period (§ 16 paragraph 1c sentence 1) from the start of which the taxable person will be making use of the special taxation procedure. The participation in the special taxation procedure is only possible if the taxable person does so uniformly for all Member States of the European Union and for all supplies of services to recipients within the meaning of § 3a paragraph 5 in the Community territory. The application of the special taxation procedure can only be cancelled with effect from the start of a taxation period. The cancellation must be declared prior to the start of the taxation period to which the said cancellation applies vis-á-vis the tax authority, in accordance with sentence 2, using the official data set by remote data transmission.

(2) If the notification in accordance with paragraph 1 sentence 1 has been submitted in Germany and if the taxable person does not meet the preconditions for participation in the special taxation procedure, the Federal Central Tax Office will assess this vis-á-vis the taxable person and will deny his participation in the special taxation procedure.

(3) A taxable person who applies the special taxation procedure mentioned in paragraph 1 must submit a VAT return to the tax authority, which he has notified of his intention to participate in the special taxation procedure, within one month after the expiration of the tax period (§ 16 paragraph 1c sentence 1), using the official dataset by remote data transmission. The taxable person is responsible for calculating in the VAT return, the tax due for the tax period. The calculated tax is due on the last day of the month following the tax period and must be transferred by the taxable person by this date to the tax authority, which the taxable person has notified of his participation in the special taxation procedure. If the taxable person provides supplies of services in Germany, in accordance with paragraph 1 sentence 1, § 18 paragraphs 1 to 4 do not apply. Any amendment of a tax return, which is made within three years after the last day of the period mentioned in sentence 1, shall be notified by using a separate tax return and by stating the tax period which is to be amended.

(4) The tax return, within the meaning of paragraph 3 sentence 1 and 2, which the taxable person has submitted to the tax authority of another Member State of the European Union is regarded as a tax declaration in accordance with § 150 paragraph 1 sentence 3 and § 168 of the Fiscal Code at the point in time when the data included in the tax return is transmitted by the responsible tax authority of another Member State of the European Union to the Federal Central Tax Office and is recorded there using a processible method. This applies accordingly with regard to amendments of tax returns. A tax return, within the meaning of sentence 1, is regarded as submitted in due time if it has been submitted to the responsible tax authority of another Member State of the European Union by the last day of the deadline in accordance with paragraph 3 sentence 1 and is recorded there using a processible method. The tax based on a tax return, within the meaning of sentence 1, is paid in due time if the payment has been received by the responsible tax authority of another Member State of the European Union by the last day of the deadline in accordance with paragraph 3 sentence 3. § 240 of the Fiscal Code is to be applied with the proviso that a late payment will be assumed no earlier than the end of the 10th day of the second month following the expiration of the tax period.

(5) If the taxable person repeatedly fails to meet his obligations according to paragraph 3 or § 22 paragraph 1 or his reporting obligations as stipulated by another Member State of the European Union according to Article 369 of the Council Directive 2006/112/EC, or does not meet his obligations in a timely manner, the responsible tax authority, which the taxable person has notified of his participation that he will participate in the special taxation procedure, shall exclude him from the special taxation procedure referred to in paragraph 1. The exclusion shall be effective as of the taxation period that commences after the date on which the taxable person is notified of such exclusion. If the exclusion results from a change of the place of seat or fixed establishment, the exclusion shall be effective as of the date of this change. The exclusion, due to the repeated failure to meet the obligations in sentence 1, also results in an exclusion from the special taxation procedures within the meaning of §§ 18j and 18k.

(6) When the notification, in accordance with paragraph 1 sentence 1, is declared vis-á-vis the Federal Central Tax Office and it then submits the tax returns to the responsible tax authority of another Member State of the European Union, §§ 2a, 29b to 30, 32a to 32j, 80, 87a, 87b and the second section of the third part and the seventh part of the Fiscal Code and the Tax Court Code are applicable with regard to the special taxation procedure.