Input VAT deduction in the case of gratuitous fulfillment of municipal obligations: tax implications and limits

• Holding of shares and fulfilling corporate obligations is not considered entrepreneurial activity
• Receipt of (construction) services for the fulfillment of a shareholder contribution does not generally entitle to input tax deduction
• Question arises whether this also applies when the shareholder contribution is a requirement for obtaining a construction and operating permit according to a building planning implementation agreement
• If the shareholder contributions are limited by a cost cap, the question also arises about the tax implications of a refund of construction costs exceeding the agreed cap
• In the case of a wind energy producer fulfilling research obligations regarding energy storage technology for obtaining a construction and operating permit, the provision of a developed property for research purposes as an (uncompensated) shareholder contribution, the purchased construction services can be deducted for input tax

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.

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