Timing and Documentation of Input Tax Deduction Allocation Decision

• The BMF letter of 17.5.2024 is a response to the case law of the ECJ and the BFH regarding the allocation decision, documentation, and deadlines related to input tax deduction for mixed-use items.
• In cases of mixed-use items, the taxpayer has the choice to allocate them entirely, partially, or not at all to their business for input tax deduction.
• Taxpayers must document their decision to allocate the item to the business in order to claim input tax deduction.
• The case law allows for some flexibility by emphasizing the importance of objectively recognizable evidence and relaxing strict documentation deadlines.

Source: datenbank.nwb.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.