Section 1: Subject matter and scope

§ 3b Place of supply of transport services and related services

(1) The place of supply for a passenger transport service is where the transport takes place. If such a transport service does not only take place in Germany, only that part of the service supplied in Germany falls within the scope of this Act. Sentences 1 and 2 apply accordingly to the transport of goods, which are not considered as an intra-Community transport of goods as defined in paragraph 3, if the customer is neither a taxable person, for whose business the service was acquired, nor a legal person who is not commercially active, but has a VAT identification number. In order to simplify the tax procedures, the Federal Government, with the consent of the Federal Council, may issue a directive concerning transport that extends to both Germany and abroad (cross-border transportation):

1. short transport distances in Germany shall be regarded as taking place abroad and short distances abroad as taking place in Germany;

2. transport services over short distances in the territories referred to in § 1 paragraph 3 shall not be treated as supplies carried out in Germany.

(2) The loading, unloading, handling and similar services associated with the transport of goods to a customer, who is neither a taxable person, for whose business the service is carried out, nor a legal person who is not commercially active, but has a VAT identification number, are performed in the place where they are in fact carried out by the taxable person.

(3) The transport of goods that begins in the territory of a Member State and ends in the territory of another Member State (intra-Community transport of goods) to a customer, who is neither a taxable person, for whose business the service is carried out, nor a legal person who is not commercially active, but has a VAT identification number, are performed in the place where the transport begins.