Public administration and § 2b UStG: creating clarity with contract management

Section 2b UStG already came into force in 2017. However, a stat­utory trans­ition­al period, the ‘Corona Tax As­sist­ance Act’ and a further trans­ition­al period give public au­thor­it­ies time to adapt their pro­cesses. The aim of the new reg­u­la­tion is to ensure that the defin­i­tion of an en­tre­pren­eur for VAT pur­poses com­plies with European law and to avoid dis­tor­tions of com­pet­i­tion between public and private eco­nom­ic op­er­at­ors. As of 31.12.2024, jPdöR must now analyse their service ex­change re­la­tion­ships: Which ser­vices are af­fected by the new legal reg­u­la­tion and which ser­vices will be taxed as before?

Biggest chal­lenge: Eval­u­at­ing the ser­vices

In order to cat­egor­ise, mu­ni­cip­al­it­ies (and other jPdöR) must assess service ex­change re­la­tion­ships ac­cord­ing to the cri­ter­ia spe­cified in the law. This in­cludes, for example, cat­egor­ising whether a service is

• rep­res­ents an in­de­pend­ent, sus­tain­able activ­ity to gen­er­ate income
• is based on private or public law
• is in com­pet­i­tion with other market par­ti­cipants

Eval­u­at­ing all current and future ser­vices ac­cord­ing to the spe­cified cri­ter­ia poses enorm­ous chal­lenges, par­tic­u­larly for local au­thor­it­ies. As every service is usually based on a con­trac­tu­al agree­ment, one key to over­com­ing this chal­lenge is a trans­par­ent con­tract man­age­ment system.

Con­tract man­age­ment as a solu­tion

Digital con­tract man­age­ment systems improve the trans­par­ency of an or­gan­isa­tion’s con­tract port­fo­lio. All digital con­tract files are stored in a central data­base – uni­formly struc­tured and easy to find for au­thor­ised users. Metadata sim­pli­fies the fil­ter­ing and cat­egor­isa­tion of con­tracts and enables, for example, the search for spe­cif­ic con­trac­tu­al part­ners or fil­ter­ing by con­tract type. With these func­tions, the user can filter certain con­tracts (e.g. tele­com­mu­nic­a­tions con­tracts) or certain con­trac­tu­al part­ners (e.g. energy sup­pli­ers) that are not rel­ev­ant for an as­sess­ment in ac­cord­ance with Section 2b UStG.

Special func­tions for greater ef­fi­ciency

However, further special func­tions are ad­vant­age­ous for an ef­fi­cient ap­proach to the ‘Section 2b ana­lys­is’: otris con­tract con­tains a special Section 2b feature for the sys­tem­at­ic review of the entire con­tract port­fo­lio. In order to filter out the con­tracts that are af­fected by the new VAT reg­u­la­tions, the user first defines which parts of the con­tract port­fo­lio are to be ana­lysed (e.g. only certain con­tract types). The system then queries the rel­ev­ant cri­ter­ia for the se­lec­ted con­tracts (e.g: ‘Is it a self-em­ployed, sus­tain­able activ­ity to gen­er­ate income?”). The user answers the ques­tions via check­boxes. The system as­sesses whether a service re­la­tion­ship is subject to § 2b UStG. At the end there is a list of all con­trac­tu­al re­la­tion­ships that are taxed ac­cord­ing to § 2b UStG. The re­spons­ible user eval­u­ates new con­tracts dir­ectly when they are created in the system.

Your contact at otris

Is the im­ple­ment­a­tion of § 2b UStG also an im­port­ant topic in your ad­min­is­tra­tion? Are you looking for a tool that will help you to fulfil the re­quire­ments with a man­age­able amount of effort? Then we look forward to hearing from you by e-mail, tele­phone or by re­quest­ing a con­sulta­tion.
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