139. VAT Treatment Of "Mailbox" Corporations

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Ruling on suit brought by the taxpayer to compel a stay of collection of assessed tax, the Brandenburg tax court has held that the VAT treatment of mailbox companies is subject to serious doubt in various respects. The court therefore granted the taxpayer's motion for a stay. The tax authorities did not appeal the ruling.

The case involved a corporation (private limited company) formed on the Isle of Man under British law. The corporation was one of the suppliers in chain deliveries of goods in Germany. It filed VAT returns on which it declared VAT charged to customers and claimed the input tax credit with respect to its expenses. It paid the balance owing (excess of VAT charged over input VAT paid or accrued). The tax authorities denied the input tax credit on the grounds that the corporation lacked sufficient