Section 6: Special schemes

§ 24 Average rates for agricultural and forestry businesses

(1) When the total turnover of a taxable person (§ 19 paragraph 3) has not, in the previous calendar year, exceeded Euro 600,000 subject to sentences 2 to 4, the VAT shall be assessed with regard to transactions carried out as part of an agricultural and forestry business as follows:

1. 5.5 percent of the taxable amount for supplies of forestry products, with the exception of sawmill products,

2. 19 percent of the taxable amount for supplies of sawmill products and beverages not listed in Annex 2, as well as alcoholic liquids, with the exception of the supply of goods outside of Germany and transactions executed abroad, and for the supply of services, provided that beverages not listed in Annex 2 are rendered,

3. 9.0 percent of the taxable amount for all remaining transactions within the meaning of § 1 paragraph 1 number 1.

The exemptions according to § 4, with the exception of numbers 1 to 7, shall remain unaffected; § 9 shall not apply. The input VAT deduction shall be set at 5.5 percent, if attributable to transactions as defined in sentence 1 number 1, and at 9.0 percent of the taxable amount for transactions in the remaining cases referred to in sentence 1. Any additional input VAT deduction shall be excluded. § 14 is to be applied under the condition that the average rate applicable to the transaction is also to be stated on the invoice.

(2) Agricultural and forestry businesses shall be classified as follows:

1. agriculture, forestry, viticulture, horticulture, the growing of fruit and vegetables, tree nurseries, all businesses that grow plants and parts of plants by means of natural forces, freshwater fishing, fish farming, pisciculture for freshwater fishing and fish farming, beekeeping, sheep farming, as well as seed propagation;

2. livestock breeding and animal husbandry, provided that the livestock are used for agricultural purposes in accordance with §§ 51 and 51a of the Valuation Act.

Ancillary businesses used to serve agricultural and forestry operations shall also be considered as agricultural and forestry businesses.

(3) Agricultural and forestry operations are to be treated as separately managed enterprises, within the structure of a business, where the mentioned taxable person executes other transactions in addition to those referred to in paragraph 1.

(4) The taxable person may notify the tax office, at the latest, by the 10th day of a calendar year that his transactions are not to be taxed from the commencement of the previous calendar year onwards in accordance with paragraphs 1 to 3, but instead under the general regulations of this Act. This notification shall be binding on the taxable person for a period of at least five calendar years; this period shall be binding on the purchaser in the event of a transfer of a going concern. It may be cancelled with effect from the commencement of a calendar year. The notice of cancellation must be submitted, at the latest, by the 10th day after the commencement of a calendar year. The deadline mentioned in sentence 4 may be extended. If the period has already expired, it may be extended retroactively, if it is considered unreasonable to allow the legal consequences resulting from the expiry of the deadline to stand.

(5) The Federal Ministry of Finance will review each year the average rage mentioned in paragraph 1 sentence 1 number 3 and sentence 3 and report on the results of the review to the German Federal Parliament. The average tax rate is calculated based on the proportion of the sum of the input VAT to the sum of the turnovers of all taxable persons which tax their turnovers in accordance with paragraph 1 sentence 1 number 2 and 3 within a period of three years. The calculated average tax rate will be commercially rounded to one position after decimal point. In the case where after the review an amendment of the average tax rate in paragraph 1 sentence 1 number 3 and sentence 3 is requested, the Federal Government will present a respective draft law at short notice.