- The Austrian Federal Ministry of Finance has clarified the tax treatment of renovation and expansion expenses for properties.
- An individual converted a company building into an event center and claimed expenses, including advertising costs.
- The Tax Authority challenged the deductibility of the expenses, arguing that the taxpayer did not establish a credible intention to rent out the property.
- The Federal Finance Court ruled that the taxpayer must demonstrate a clear intent to generate income from property activities to claim deductions.
- Advertising costs are deductible if they are incurred to pursue rental income and supported by evidence of intent.
- Failure to establish a credible intention to rent out the property results in the disallowance of deductions for business expenses and input taxes.
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.