Commentary on VAT deduction for new heating system in rented residential property – BFH 18.03.2024

• The input discusses the deduction of input tax from the construction of a heating system in rental housing.
• The article explains that if a landlord is responsible for providing heat and hot water to tenants, the costs of a new heating system can be directly related to tax-exempt rental activities.
• The legal background states that input tax can be deducted for services provided by another business, except for those used for tax-exempt transactions.
• The case involves a partnership renting a house with two apartments, where the landlord replaced the heating system in 2016.
• The tax office initially denied the input tax deduction, claiming that the heating and hot water services were part of tax-exempt rental activities.
• The partnership filed a lawsuit and eventually succeeded in claiming input tax deductions for the heating system installation.

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.

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