Average rate taxation for domestic agriculture and forestry only

Entitlement to average rate taxation for agricultural and forestry businesses is not dependent on the place of performance, but on the fact that the business is based in Germany.

Under certain conditions, agricultural and forestry businesses can make use of average rate taxation for their sales, which means that no VAT is payable on the products sold. However, the Federal Fiscal Court has now clarified that this regulation only applies to domestic businesses. Agricultural and forestry businesses from neighboring countries that sell products in Germany cannot claim average rate taxation. According to the court, this is also supported by the wording of the EU VAT Directive.