Germany's Federal Ministry of Finance issued a letter on 9 April 2026 updating administrative guidance on VAT exemptions for supplies preceding importation from third countries, significantly expanding the scope of explanations in section 4.4b.1 of the German Administrative VAT Guidelines (UStAE).
Key Changes
The updated guidance incorporates much of the previous BMF letter from 28 January 2004 and divides explanations into four categories: fundamental principles, individual special customs procedures, scope limitations, and proof requirements. The BMF has notably restricted the customs warehouse regulation for supplies to end consumers, which are now generally excluded from VAT exemption unless the customer clears the goods for free circulation.
For proof requirements, the guidance clarifies scenarios where final use of goods is undetermined at the time of supply. The BMF confirms that proof requirements are met if a status certificate as non-Union goods ensures the supplying taxable person does not clear goods for free circulation.
Transitional Provisions
The guidance includes a non-objection provision for supplies made up to 8 April 2026, allowing taxpayers to have treated such supplies as VAT exempt even if they no longer qualify under the new regulation. The restriction on customs warehouse provisions lacks clear basis in either the legislative materials for section 4 no. 4b UStG or the EU VAT Directive articles 155 and 156.
Context
This update provides increased legal certainty for applying VAT exemptions under section 4 no. 4b UStG, particularly for goods under special customs procedures pursuant to Article 210 of the Union Customs Code. The guidance addresses practical compliance issues while introducing new restrictions that require businesses to reassess their customs warehouse operations involving end consumers.
