The Hanoverian 07|2013

Hannoveraner Verband
with the full VAT of 19% since July 1st, 2012. The
result was that since that time, the end user had to
invest 12% more when buying a horse. With the
decided change to an agency based business, the
customers of the Verband receive the economic tax
benefits which are currently offered. These measures
are meant to stimulate the purchase behaviour
at the auctions. We would like the Verden auctions
to become more attractive again, because the buyer
can invest more of the total budget directly towards
the knock down price. This is of advantage
for both sides: the exhibitor can be pleased about
more bids and the customer has more money to
spend for the desired horse.
DER HANNOVERANER: Let‘s have a look at
this innovation in practice: When and where
do specifications to an individual sales tax
rate have to be made? What happens if
nothing gets claimed?
Gerhard Wiechers: Nothing changes with the current
rules and regulations. With the approval of a
horse to one of the Verden auctions, the Verband
issues a contract with the exhibitor regarding the
auction conditions. Part of the contract is about
the conditions, specifying sales billing, in which the
exhibitor has to answer sales tax rate questions.
Experience has shown that the exhibitors are aware
of their status in this regard. We have been able
to give professional assistance in single cases
when lack of clarity or uncertainty was apparent.
This has worked well in the past, and I estimate it
won‘t be a problem in the future either. The three
different tax rates will be published in the auction
brochure with each horse. The exhibitors have to
have given their sales tax information at the editorial
deadline. If that has not happened, the candidates
will automatically have a 19% sales tax. A
belated change is not possible.
DER HANNOVERANER: Up to now, the calculation
amount revealed the following:
Knock down price + 6% commission= net
amount + 19% VAT= gross price + 1% insurance
= final balance amount. What does
the new calculation model look like?
Gerhard Wiechers: That is the calculation model in
a commission based business. The Verband on the
other side is now a broker in an agency based
business, and the individual sales tax rate of the
exhibitor (commercial or farmer opting to tax =
19%; flat tax farmer = 10.7%; hobby breeder/private
+ 0%) gets billed to the buyer. This is what
the purchaser’s settlement looks like:
Knock down price + sales tax rate of the seller
(0%, 10.7% or 19%)
= subtotal 1
+ auction fee in the amount of 6% of the knock
down price plus 19% VAT on this (as is laid down
in §§ 12, 2 German VAT Act)
= subtotal 2
Subtotal 1 plus subtotal 2= gross price + 1% insurance
plus 19% tax on insurance
= final balance amount
The change is that the sales tax rate of the seller
gets added to the knock down price. The commission
amount and the VAT of 19% on this commission
as well as the insurance premium stay the
same.
DER HANNOVERANER: Auction horses now
get taxed in three different categories. Do
exhibitors with the highest sales tax rate
have a disadvantage?
Gerhard Wiechers: It might look like that at first
glance. The billing stays the same for the exhibitor,
just as it was with the up to now system. Nothing
is getting more expensive, but to be honest, it isn‘t
getting cheaper either. However, we are hoping to
stimulate the general buyer’s behaviour, from
which the exhibitors should also benefit. Overall, it
should and will be the liking of the new Hanoverian
horse, not the tax rate of the exhibitor, that will
decide on a purchase.
DER HANNOVERANER: How will the Hannoveraner
Verband handle claims in the future?
Gerhard Wiechers: In formal legal terms, changes
in the relationship between buyer, seller and the
Verband will arise. The attitude of the Verband in
regards to direction and assistance of the breeder
in cases of complaints will remain unchanged. The
auction conditions will be adapted accordingly.
The Verband is aware of its responsibility for the
exhibitor and will continue to perceive so.
DER HANNOVERANER: What will be different
with the change for clients from other
countries?
Gerhard Wiechers: The essential change for foreign
clients is that the billed sales tax rate from farmers
using a flat tax cannot be refunded, as the tax
from the exhibitor does not get paid to the tax authorities.
However, the billing for export in the settlement
is more extensive and will lead to an increased
need for explanation. Furthermore, export
details and transport decisions need to be made by
the buyer as soon as possible after the purchase.
Up to now, the Verband has organized the requirements
associated with export for their own VAT
return. Now, we have to meet the requirements for
the exhibitor and provide for their accounting.•
New starting bids:
The executive committee of the
Verband decided to change the
starting bids at the auctions as
follows:
Interim auctions:
new 6,000 Euros
(so far 4,000 Euros)
Elite riding horse auctions:
new 10,000 Euros
(so far 7,000 Euros)
Broodmares:
new 6,000 Euros
(so far 5,000 Euros)
Foals:
new 3,000 Euros
(so far 2,500 Euros)
Licensing (licensed stallions)
new 15,000 Euros
(so far 12,500 Euros)
Licensing (non-licensed
stallions)
new 8,000 Euros
(so far 7,000 Euros)
Raising bids will be as of now for
riding horses, broodmares and
stallions at least 500 Euros and
for foals at least 300 Euros.
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