VAT Input Tax Correction for Ongoing Construction in Building Phases

The Baden-Württemberg tax authority issued guidance on input tax corrections for ongoing construction projects built in phases, particularly regarding changes in circumstances within a construction project
Input tax corrections are required for business assets used repeatedly when circumstances change during the relevant correction period, with separate correction periods for each part of a building put into use before overall completion
For advance or partial payments during building construction, the right to input tax deduction arises when payment is made and an invoice is issued, based on the entrepreneur’s objectively documented and good faith intention at the time of payment
Changes in usage intention within a construction project do not have retroactive effect and do not allow for subsequent input tax deductions or denials, but rather require corrections under tax law from the time of initial use
Input tax corrections must be based on total input tax amounts attributable to the separate correction object, using a percentage ratio of original input tax deduction to total input tax volume as the basis for determining the correction

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.