- The right to deduct input VAT is broadly defined under the current VAT Act.
- The distinction between entrepreneurial and non-entrepreneurial activities affects input VAT deduction.
- The Federal Supreme Court dealt with this distinction in judgement 9C_651/2022.
- The case involved an association that organized Christian musicals.
- The association generated income from donations and various services.
- The FTA denied the association an input VAT deduction for the musicals.
- The Federal Supreme Court referred to previous case law on non-entrepreneurial spheres.
- A non-entrepreneurial sphere is characterized by a lack of sustainable income from services.
- The main purpose of the musicals was non-profit or idealistic activity, not income generation.
- The association’s idealistic purpose can be clearly distinguished from its entrepreneurial activities.
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.