- The European Court of Justice ruled that the national tax authority can deny input tax deduction if a taxpayer has the choice to allocate an item to their business assets but fails to provide evidence of this allocation by the deadline for submitting the VAT return.
- The Federal Fiscal Court ruled that no deadline-bound notification to the tax authority is required for documenting the allocation of assets. Objective evidence of allocation can be provided even after the deadline.
- The Federal Fiscal Court also ruled that labeling a room as a home office in building permit documents can support the allocation of a building part to the business, especially if the taxpayer has used a room in their home for business purposes in the past.
- Notification to the tax authority of the allocation is only necessary if there are no objective indications of allocation to the business assets.
- The allocation of a building to the business was documented multiple times within the allocation period in a specific case, including in building plans, a lease agreement, and a questionnaire to the tax authority.
- It is recommended to follow the rulings of the European Court of Justice and the Federal Fiscal Court when allocating assets to the business for tax purposes.
Source: bundesfinanzministerium.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.
