Place of sales

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In German and European VAT law, the place of sales is the place where an entrepreneurial service (sale, service) was provided or to which it is attributed under tax law. Its determination is one of the central issues in sales tax law, because only that business performance falls under the respective national sales tax law, whose 'place of sales' is in Germany.

German sales tax law

According to Section 1 (2) UStG, German sales tax law defines the territory of the Federal Republic of Germany as domestic, excluding the area of Büsingen , the island of Helgoland , the free ports, the waters and mud flats between the sovereign territory and the beach line, as well as the German ships and aircraft in areas that do not belong to any customs area.

In order to determine whether there is a turnover in this area, a distinction is made between deliveries (moving and stationary deliveries) and other services. The place of delivery (including sales) is where the customer actually has power of disposal over the item.

In the second step, various special regulations are to be checked in a legally prescribed sequence for both deliveries and other services.

Delivery with goods movement

Pick-up case

In the case of collection, the place of delivery is where the transport (collection) begins.

Example: A baker sells a loaf of bread (subject in terms of § 90 BGB ) → handover = provision of power of disposal → location according to § 3 Paragraph 6 S. 1 UStG: Place of delivery: in the shop

Transportation delivery

A transport delivery - § 3 Paragraph 6 UStG (transport and dispatch) - exists if the entrepreneur himself or an employee (dependent agent) carries out the transport of the goods. Sales are deemed to have been effected at the start of the transport (first movement of goods). The place and time of delivery is therefore determined by the start of delivery or the time of transport (first movement of goods).

Shipping delivery

A dispatch delivery occurs when the entrepreneur has the transport of an object carried out or arranged for by an independent agent. The place of delivery is determined in accordance with Section 3 (6) sentence 1 UStG: ... where shipment begins ...

Special information about the transport / dispatch delivery

The prerequisite for transport or dispatch is that the recipient is known at the beginning of the transport and that the delivery item is actually being transported or dispatched and not just moved. Because if one thing is Section 90 BGB moves without the legal term "conveying" or "dispatching" being present, it is indeed a matter of what is known as "bringing without legal transactions".

Example: A baker owns a sales trolley . He loads his car in Kehl (Germany) with goods that he sells on the market in Strasbourg (France). Since the end users have not yet been determined at the start (when loading), the movement of goods to Strasbourg is merely a matter of bringing them without a legal transaction. Rather, the place of delivery is determined in accordance with Section 3 (6) UStG (collection delivery) and is Strasbourg, where the buyer acquires the goods. This results in the non-taxability of sales in Germany.

Delivery without goods movement

A typical example of an "unmoved delivery" is the sale of a property with or without a building. In accordance with Section 3 (7) UStG, the place of delivery is where the item is at the time the power of disposal is obtained.

Other services

Any sales tax service that does not constitute a delivery is another service. The place of the other service is generally regulated in § 3a UStG. However, the special local regulations for transport services ( Section 3b UStG), restaurant services on board ships, airplanes or railways ( Section 3e UStG) and other free services ( Section 3f UStG) must be checked as a priority.

Among business customers, the principle applies that the place of the other service is at the place of the service recipient. Services to non-entrepreneurs are generally located where the providing entrepreneur operates his company. Numerous exceptions apply to these principles, which require careful individual examination. Examples of such exceptions:

  • Services in connection with a property are carried out at the location of the property.
  • The short-term rental of a means of transport is carried out at the handover location.
  • Cultural, artistic, scientific, teaching, sporting, entertainment or similar services for non-entrepreneurs are provided at the place of work.
  • The delivery of food and drinks for consumption on the spot (except on board a ship, airplane or train) are provided at the delivery location.
  • Brokerage services to non-entrepreneurs are provided at the place of the brokered turnover.