VAT Treatment of Public Sector; Input Tax Deduction for Public Law Legal Entities – BMF Guidelines

• BMF issued a letter on 12.6.2024 regarding input tax deduction for legally active public law entities
• The letter addresses the application of § 2b UStG in relation to input tax deduction for legally active public law entities
• The letter corresponds to the draft version published on 25.10.2022
• Changes to the entrepreneur status of public law entities were made with the introduction of § 2b UStG in 2017
• Transitional provisions allow for the continued application of the old regulation of § 2 Abs. 3 UStG under certain conditions
• The government draft of the Annual Tax Act 2024 proposes an extension of the transitional provision until 31.12.2026

Source: datenbank.nwb.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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