If a transaction relates partly to the provision of services and partly to the compensation of a seller for the losses incurred, an adequate distribution of the payment within the meaning of Paragraph 10(22) of the UStG is necessary. The part of the payment which relates to the losses incurred is not subject to VAT, while the part of the payment received in return for the services supplied is subject to VAT. It is therefore desirable that the transaction agreement clearly define the amount of the transaction to be carried out for each part of the claim. . . .
Vat On Settlement Agreement