Federal Ministry of Finance Guidelines on Allocation of Goods to Economic Activity: Key Considerations and Requirements

• Taxable persons can allocate goods used for both economic and non-economic purposes to their economic sphere
• Allocation decision must be documented in a timely manner
• Federal Ministry of Finance addresses allocation of single asset to economic sphere based on current jurisprudence
• Allocation to economic activity implies acting as a taxable person
• Decision to use higher proportion for economic purposes does not have retroactive effect on input VAT deduction
• Allocation decision must be made at time of procurement and documented by statutory deadline for tax returns
• Objective evidence of allocation to economic sphere includes purchase/sale under company name, business insurance, accounting treatment, building application documents
• Lack of objective evidence requires explicit notification to tax office before documentation deadline

Source: kmlz.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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