§ 4 UStG applies to exemptions from sales tax. Tax exemptions only remain in effect if they are granted for deliveries or other services to the end consumer, because they are lifted again in the previous economic stages if they are not passed on to the end consumer.
Tax exemptions relate to facts that appear necessary from the system or on which a different transaction tax is based, or they are facts that justify an exemption for social reasons and do not result in a shift in the competitive situation. The UStG catalogs the tax exemptions:
Tax-free sales with Input tax deduction (Section 15 (3) UStG), which are predominantly export sales (Section 4 No. 1 to 6 UStG), such as intra-community deliveries, export deliveries to third countries, contract processing, transports in international freight traffic, sales for maritime shipping and aviation (Section 8 UStG ), Deliveries of gold to central banks.
Tax-free sales that can be declared taxable by exercising an option (§ 4 No. 8a-g, 9a, 12, 13, 19 in conjunction with § 9 UStG), such as monetary and Movement of capital, Sales according to the Land Transfer Tax Act (GrEStG) or rental and leasing sales.
Tax-free sales for which there is no possibility to waive the exemption and thus the input tax deduction is excluded (Section 4 in conjunction with Section 15 (2) UStG).
Thanks to the tax exemption without input tax deduction, the entrepreneur can use the amount paid to the supplier value added tax do not deduct as input tax. In addition, he cannot invoice his customers for sales tax, as he does not have to pay any tax to the tax office himself.
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