- The Federal Finance Court clarified input VAT deductions on rental properties.
- A domestic company purchased rental properties and took over existing leases.
- The Tax Office denied input VAT deductions because the tenant’s activity was VAT-exempt banking transactions.
- The Federal Finance Court ruled that Section 6 of the VAT Act doesn’t apply to the taxpayer’s rental income since the lease began after August 31, 2012.
- Vacant spaces and attics weren’t considered part of the property’s VAT-liable area without evidence of an intention to rent them.
- Nondeductible input tax for assets that must be capitalized aren’t immediately deductible from corporate income tax but must be capitalized as part of the asset’s acquisition or production costs.
Source: news.bloombergtax.com
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.
