Patrick Bubeck and Dr Tobias Stiegler take a closer look at the NWB contribution with the new BMF letter on construction withholding tax. After more than 20 years, the Federal Ministry of Finance has revised its application letter on construction withholding tax. The amendment may be due to the boom in the construction industry, which has been ongoing for years, in order to sensitise all practitioners and the tax authorities themselves with regard to these regulations.
Last year, the two authors had already dealt with the legal consequences of a fundamental BFH ruling on construction withholding tax and also published a Essay published. Following this judgement, it was to be expected that attention to such special regulations in income tax law would change (cf. TXGT blog from 19.04.2021). The BMF now confirms the Comprehensive scope of application of the construction withholding taxso that, for example, the construction of photovoltaic systems is also covered by the scope of application. Domestic clients/service recipients should pay particular attention to construction services provided by foreign contractors in order to completely avoid any tax risks or tax liability issues in advance.
Ultimately, all contractors, landlords, etc. working in the construction industry should obtain an overview of the scope of application of the construction withholding tax, especially as compliance with such regulations is also becoming increasingly important for medium-sized companies. Your TAXGATE Team is always available to help you analyse and set up a lean, practical tax compliance system.
