The Net Tax Rates (NTR) for architects and engineers is already now 6.1%
Last week the FTA published Changes in some Net Tax Rates (NTR) at 1.1.2015. 30 industries/activities are affected by these changes. In most cases the FTA has increased the NTR slightly; in some cases the activity is described differently. Drastic is the change for courier services, which for their transport use bicycles, mopeds or motor bikes. For them the NTR is increased from 4.4% to 6.1%. This is intended to take account of the fact that for these businesses their costs which include input tax (including investments) are lower than for classical transport companies, which use vans and trucks.
Parking spots are also subject to a significant change. Up to now an NTR of 3.7% could be applied. In future a distinction will be made as to whether the parking spots are in the open air or not. If they are outdoors, the NTR is 5.2%. For parking spaces in or on buildings the NTR of 3.7 % can continue to be applied.
Every change in the NTR has the consequence that at the beginning of the next tax period a change can be made from the effective reporting method to the NTR method. This is also possible, if the retention period of three years pursuant to Art. 37 Para. 4 VAT Law has not yet expired. Conversely, after the end of a tax period, a change can be made from the NTR method to the effective reporting method.
For the industries/activities concerned it is therefore worthwhile investigating whether it would make sense to withdraw from the NTR method. To do this it is necessary in a simple comparative calculation to determine whether the difference between the applicable VAT rates and the NTR is sufficient to cover the input tax effectively incurred on the investments. If in the coming three years (retention period for reporting using the effective method) higher investments and costs can be expected, it could be worthwhile withdrawing from the NTR method.
In any event it is necessary to ensure that from 1.1.2015 the right NTRs are used. The FTA has indicated that it will inform the taxpayers concerned by separate letter.
All changes in the method must be notified in writing to the FTA by the end of February 2015.