The German transport ministers’ conference calls for optimization of tax levying mechanism for importation VAT
The German transport ministers’ conference has spoken out for the optimization of the tax levying mechanism for importation VAT. In their resolution, they have determined that discrimination is no longer tolerable against sea and inland ports and airports, as well as the entire German logistics and forwarding sector. It is caused by the current tax levying process in Germany for import VAT compared to neighbouring countries. To eliminate the disadvantages for German companies, they have spoken out for a harmonization of import VAT with the neighbouring countries.
The central association of German seaport operators – ZDS welcomes this additional resolution by a state ministers’ conference. Already, recently both the state finance ministers (see ZDS Monitor 24/18), as well as the state economics ministers spoke out for optimization of the tax levying mechanism. Now, henceforth, consensus also reigns among the state transport ministries that the current mechanism impairs Germany’s competitiveness and deprives the German tax authorities of potential tax income.
ZDS calls for the tax levying mechanism for importation VAT to be reformed as quickly as possible. According to the recently published annual report by German Customs, last year some 59.4 billion euros were levied in import VAT compared to 55.9 billion euros in 2017. The offsetting model, which is favoured by both those involved commercially and that was also identified as the most comprehensive solution by the responsible federal/states working group, should therefore be quickly implemented. This is the only way to counteract the acute competitive disadvantage for the importers, forwarders, air- and seaports located in Germany. In addition, both tax and Customs revenue will be diverted from abroad to Germany.
According to Article 211 of the EU VAT system guideline of 2006, it rests with the member states, to allow simplifications of the tax levying mechanism for importation VAT. Almost all member countries have made use of this. Apart from Germany, only Greece, United Kingdom, Ireland, Italy and Cyprus have not exploited the opportunities presented by the guideline.