132. VAT Treatment Of Online Services

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In article no. 89, we reported on the changes in the German VAT treatment of telecommunication services which took effect on 1 January 1997. In this article, we noted that the tax authorities were preparing to issue a directive clarifying the scope of telecommunication services and distinguishing this service category from that of so-called "tele-services."

1. Tele-services and telecommunication services

The tax authorities released their directive in late 1997 (DB 1997, 2403 - 18 Nov. 1997). As expected, the directive provides that tele-services are not identical to telecommunication services and hence are potentially subject to different VAT treatment.