Value Added Taxation of Public Authorities – § 2b VAT Act; Input Tax Deduction for Public Law Entities

• New regulations regarding the entrepreneurial status of public law legal entities were introduced on January 1, 2017
• A transitional provision allows public law legal entities to continue applying the previous regulations for services rendered before January 1, 2021
• An additional provision extends this transitional period for services rendered between January 1, 2021 and December 31, 2022, unless revoked
• The option to apply the new regulations under § 2b UStG was extended by the Yearly Tax Law 2022
• The document provides guidelines on input tax deduction for public law legal entities and the allocation of input services to the business
• Specific rules for dividing input tax amounts for partially entrepreneurial legal entities are outlined
• Guidelines for central procurement and alternative input tax allocation methods based on budget estimates are provided
• Changes to the VAT application decree are also discussed in the document.

Source: bundesfinanzministerium.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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