- The FG Münster has ruled that a municipal GmbH can deduct input tax from the development of a commercial area.
- A GmbH, in which a city is 85% involved and a bank is 15% involved, brought a lawsuit before the FG Münster.
- The purpose of the GmbH is to develop new commercial areas in the city and make them ready for construction.
- The city transferred the development of the building area to the GmbH.
- The GmbH sold the properties to various entrepreneurs and opted for VAT liability.
- The dispute was about the deduction of input tax for the development facilities.
- The tax office rejected the deduction for the development facilities, as they were transferred to the city free of charge.
- The tax office argued that there was no economic connection with the property sales and that it would create unfair competition.
- The GmbH argued that the development of the facilities was necessary for the property sales.
- The lawsuit was successful.
Source: haufe.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.
