Leasing and Loan Business: Proportionate Deduction of Input VAT

This case involves a dispute between a taxpayer and the tax authorities regarding the proportional deduction of input VAT in a leasing business. The tax office adjusted the taxpayer’s VAT returns for 2014-2016, arguing that the taxpayer’s allocation of common costs between taxable and exempt activities was incorrect. The core issue is whether the taxpayer’s revenue-based allocation key, used to calculate the deduction, accurately reflects the “presumed use” of these costs. The tax office believes it does not, particularly due to the differences in revenue calculation between leasing and lending activities. The taxpayer maintains that their allocation key is reasonable and reflects business judgment. The Tax Appeals Board ultimately upheld the tax office’s decision, but reduced the additional tax penalty due to excessive processing time.

Source: skatteetaten.no

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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