- VAT Deductions allow taxable persons to reclaim VAT paid on acquired goods and services
- The right to deduct VAT involves subtracting the deductible amount from the VAT payable to tax authorities
- VAT can be deducted on domestic supplies, intra-EU acquisitions, importation of goods, and certain exempt transactions
- Full deduction applies to VAT due on goods and services used for activities giving rise to the deduction
- Proportional deduction applies when direct attribution of expenditure is not possible
- The right to deduct arises when the deductible tax becomes chargeable
- Special rules apply for the ‘cash accounting’ scheme
- Conditions for deduction include VAT being due or paid on the domestic purchase and the purchased goods and services being used for activities giving rise to deduction
Source: taxation-customs.ec.europa.eu
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.
