With the letter, dated 20 October 2022, the Federal Ministry of Finance has implemented the long standing Federal Fiscal Court case law regarding the determination of input VAT apportionment pursuant to Section 15 (4) of the German VAT Act for mixed-used properties. With its letter, the Federal Ministry of Finance binds the tax administration to the interpretation of the Federal Fiscal Court in conformity with the VAT Directive and ECJ case law. This is an important step. The input VAT must be apportioned based on an appropriate apportionment formula, which will be determined and selected by the taxpayer. The tax authorities can only check whether the method is suitable.
Source: KMLZ
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