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VAT Deduction Allowed for Legal Fees Despite Non-Taxable Compensation, Court Rules

  • A company was established to provide services to a specific client
  • The client canceled the service contract before services began
  • The client had to pay damages to the company
  • The company can claim input tax deduction for legal advisory services related to obtaining the damages
  • This was ruled by the Berlin-Brandenburg Fiscal Court on May 29, 2024
  • An appeal has been filed with the Federal Fiscal Court

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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