In a letter to EU Economic Commissioner Paolo Gentiloni, Finance Minister Christian Lindner (FDP) calls for changes to the sales tax liability for public law institutions that is due at the turn of the year. Due to the interpretation of the relevant EU directive, “increasingly massive problems have arisen in practice,” says the letter from this week, which is available to WELT AM SONNTAG. The narrow interpretation of the non-competition clause increases the cost of cooperation between municipalities, which is important.
The same applies to research institutions and universities. They see academic freedom as threatened by the threat of sales tax. “It must be our common goal not to jeopardize the high level of approval for European unification in the Federal Republic of Germany through excessively narrow specifications in one area,” wrote Lindner to Gentiloni.
The main issue here is Article 13 of the EU Value Added Tax System Directive. This stipulates that from January 2023 every service that a private entrepreneur can also provide must be invoiced by public law institutions including sales tax. This affects municipalities in particular.
For example, it is not uncommon for the building yard in one municipality to take on the winter service and park maintenance for a neighboring municipality. The EU Commission sees no need for adjustment. “The Commission is not currently working on a proposal to change Article 13,” the Commission told WELT AM SONNTAG.
