By Dr. Martin Krause Partner Linklaters Oppehoff & Radler, Frankfurt am Main, Germany

In its decision of Sept. 4 (see V R 34/99 at, the Federal Fiscal Court (Bundes- finanzhof or BFH) implemented the decision taken in the preliminary ruling procedure of the European Court of Justice ("ECJ") dated June 26, 2003 in the matter of MKG-Kraft- fahrzeuge-Factoring GmbH. The court confirmed that a factoring company also qualifies as an enterprise under German tax law in the case of non-recourse factoring and granted the company the right to deduct input tax for services received. This decision is in line with prior ECJ rulings and is therefore not surprising.

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