VAT Allocation in Insolvency: BFH Ruling on Business Continuation by Insolvency Administrator

• The BFH addressed the issue of input tax allocation during the continuation of a business in insolvency proceedings.
• The decision is related to another BFH decision from the same day.
• Input tax from an insolvency administrator’s service must be allocated according to § 15 Abs. 4 UStG.
• This applies when the insolvency debtor uses the service for both business and private insolvency liabilities.
• Exceptionally, input tax allocation can be based on the debtor’s overall activity during administration.
• This is applicable if the insolvency administrator continues the debtor’s business without liquidation actions.

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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