Destination principle
The country of destination principle within the meaning of the Value Added Tax Act is the taxation of a delivery or service with the value added tax of the country of destination. This means that sales tax is borne by the final consumer in the state in which the final consumption of the delivery or service takes place.
The general regulation in the Value Added Tax Act provides that the place of delivery is where the transport or dispatch begins ( Section 3 (6 ) UStG ). There are various exceptions to this in order to achieve taxation in the country of consumption:
- Tax exemption for deliveries to non-EU countries (third countries), the goods are subject to customs and import sales tax in the destination country
- Tax exemption for intra-community deliveries , the purchaser taxes the delivery as an intra-community acquisition
- Tax exemption for the intra-Community delivery of new vehicles, the buyer pays the sales tax in the country in which he registers the vehicle
- Mail order regulation , the VAT relocation of the place of delivery according to § 3c . In the case of deliveries to private individuals on a large scale (e.g. Internet mail order companies), the location is shifted to the country of the buyer, so the supplier has to pay the sales tax in the buyer's country. For this, each country independently defines a delivery threshold. Smaller companies with few deliveries abroad can thus show the sales tax of their home country and do not have to be laboriously registered in other countries. However, these exemptions do not apply to goods subject to excise duty (alcohol, mineral oil, tobacco, coffee ...).
