No Margin Scheme for Partially VAT-Deductible Goods in Upcycled Washstands Delivery Case

• No differential taxation for partial right to deduct input tax on the delivered item
• The case involves the delivery of a washstand composed of a cabinet without input tax deduction rights and sanitary items with input tax deduction rights
• The Federal Fiscal Court overturned the previous decision of the Schleswig-Holstein Finance Court
• The case is sent back to the Schleswig-Holstein Finance Court for further proceedings
• The issue is whether differential taxation can be applied to upcycled washstands
• The plaintiff buys antique cabinets, restores them, and adds new parts to create new washstands
• The plaintiff issued two invoices for each transaction, one for the restored cabinet and another for the washstand assembly
• An external audit concluded that differential taxation was not applicable as the end product is a new item
• The tax office issued amended tax assessments denying the application of differential taxation for 2015 to 2017

Source: bundesfinanzhof.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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