Section 2: Exemption from VAT and tax refunds

§ 7 Outward processing of export goods

(1) Outward processing of goods subject to an export (§ 4 number 1 lit. a) is given where, as regards the treatment and processing of the goods, the ordering purchaser has imported the goods into community territory for the purposes of treatment and processing or has acquired them in this territory for said purpose, and

1. the taxable person has transported or dispatched the treated or processed goods to a third country territory, with the exception of the territories referred to in § 1 paragraph 3, or

2. the ordering purchaser has transported or dispatched the treated or processed goods to a third country territory and is a foreign purchaser, or

3. the taxable person has transported or dispatched the treated or processed goods to territories referred to in § 1 paragraph 3 and the ordering purchaser is

   1. a foreign purchaser, or

   2. a taxable person who is resident in Germany or in the territories referred to in § 1 paragraph 3 and uses the treated or processed goods for the purposes of his business.

The treated or processed goods may have been treated or processed by authorised third parties prior to export.

(2) A foreign purchaser, within the meaning of paragraph 1 numbers 2 and 3, shall be a purchaser who meets the foreign purchaser criteria (§ 6 paragraph 2).

(3) Paragraph 1 shall apply accordingly with regard to work services within the meaning of § 3 paragraph 10.

(4) The taxable person must demonstrate that the requirements stipulated in paragraph 1 have been met, as well as the treatment and processing within the meaning of paragraph 1 sentence 2. The Federal Ministry of Finance, with the consent of the Federal Council, may issue a directive as to how the taxable person must provide the necessary proof.

(5) Paragraphs 1 to 4 shall not apply to supply of services within the meaning of § 3 paragraph 9a number 2.