- Businesses can allocate expenses to either business or non-business activity if at least 10% is used for each
- Allocation must be documented in a timely manner
- No general, time-bound notification to tax authorities is required for allocation decision
- Input VAT recovery method is sufficient to inform tax authorities
- Other indications such as purchase under company name or accounting treatment can also be considered
- The circular simplifies the allocation process and offers a last resort option
- Proper notification within the deadline is still advisable for legal certainty.
Source: dlapiper.com
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.
Latest Posts in "Germany"
- German MOF Proposes Tax Relief Measures in Draft Tax Amendment Act 2025
- Germany Proposes Permanent VAT Reduction for Restaurant Services in 2025 Tax Amendment Bill
- Webinar MDDP: E-invoicing for SMEs – upcoming changes in Poland, Germany and Belgium (Sept 9)
- VAT Exemption for Export Deliveries: Clarification of EU Court’s Anti-Abuse Rulings and Guidelines
- Tax-Free Mediation Services for Online Loan and Bank Account Brokerage by Hidden Intermediaries
