Transition period extended for application of VAT reverse charge to supplies of metals

The Ministry of Finance (BMF) has extended the non-objection period for the application of the VAT reverse-charge mechanism on supplies of certain metals.

In a circular dated December 05, 2014, Germany’s Ministry of Finance (BMF) extended the “non-objection period” for the application of the VAT reverse charge mechanism on supplies of precious metals, metals, selenium and cermet to June 30, 2015 (previously December 31, 2014). These supplies became subject to the reverse charge on October 1, 2014, meaning that the recipient of the supply has now to account for VAT. The non-objection period applies provided the parties to the transaction agree that the supplier displays the VAT on the invoice and provided that the supplier actually pays the VAT due.

Further the German government is expected to establish a value threshold of EUR 5,000 for the application of the reverse charge so that minor supplies would fall outside the scope of application of the mechanism. Pending legislation also intends to amend the annex of the VAT Act that lists the scope of goods subject to the reverse charge mechanism.