VAT reduction - impact on the construction industry?!

2. August 2020

As is well known, the economic stimulus package to contain the economic consequences of the coronavirus pandemic has resulted in a temporary reduction in VAT. This has also had an impact on the construction industry. Many clients are therefore keen to take advantage of this VAT reduction in the construction and planning sector.

Construction projects that were already started before 1 July 2020 and will be ready for acceptance in the second half of 2020 are eligible for this. With its circular dated 30 June 2020 on the "Temporary reduction of the general and reduced VAT rate as of 1 July 2020", the Federal Ministry of Finance has provided guidelines, but these still leave many questions unanswered. In particular, the requirements for the billability of partial services at the reduced VAT rate are only seemingly clearly formulated and leave limited room for manoeuvre, especially when structuring contracts for work and services. Tax law expertise is required here in particular However, specific construction law issues also arise, particularly with regard to the drafting of contracts and the issue of the billability of partial services. *** Translated with www.DeepL.com/Translator (free version) ***

We can serve this interface between construction and tax law with our expertise in construction law. We are happy to liaise directly with your tax advisor.

Contact person:

Angelika Frohwein, LL.M. Eur.

Lawyer and specialist lawyer for construction and architectural law