BMF Adapts to New Case Law on Input Tax Deduction: Implications for Businesses

• The BMF responded to a change in case law regarding input tax deduction
• The BFH allowed for input tax deduction from indirectly related input services for economic activities
• The BFH ruling on 16.12.2020 is a follow-up decision to a referral to the ECJ in the case “Mitteldeutsche Hartstein-Industrie”
• The BMF letter on 24.1.2024 implements the BFH ruling
• Previously, input tax deduction was only allowed for direct input services, not for indirect connections

Source: datenbank.nwb.de

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.