Changes of the Reverse Charge Method for Property Developers

    May 2015

    On 22 August 2013, the Federal Fiscal Court (Bundesfinanzhof) ruled that property developers are not principally liable for the payment of taxes on building services that they receive. Later, this view was further enforced by three letters from the Federal Ministry of Finance dated 5 February 2014, 8 May 2014 and 31 July 2014.

    However, a new regulations introduced as of 1 October 2014 – in particular, section 13 b German VAT Act (UStG) – has essentially restored legal rules to their previous condition, which applied in relation to tax liability in the case of building services prior to 14 February 2014.

    This publication (available only in German) sets out further information relating to changes of the reverse charge method for property developers.