Restrictions on Input Tax Deduction when Switching from Flat Rate Taxation to Regular Taxation

• A farmer who switches from the flat-rate taxation to the regular taxation cannot deduct input tax from a service received before the switch and used for supplies after the switch.
• The exclusion of additional input tax deduction beyond the flat-rate deduction also applies if the switch is mandatory due to exceeding the turnover limit of €600,000.
• The plaintiff was a farming partnership that taxed its turnover according to flat rates in 2021. They exceeded the turnover limit in 2021 and had to switch to regular taxation in 2022. In 2021, they received a service…

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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