German Fiscal Court Clarifies Input VAT Deductions for Claim Enforcement Costs

• Germany’s Federal Fiscal Court (Decision V R 15/24) clarified when input VAT can be deducted for costs incurred to enforce claims.
• A company paid consulting fees to successfully sue a client after the client terminated a project contract before implementation.
• The tax office denied the input VAT deduction, but the Berlin-Brandenburg Finance Court had ruled for the taxpayer.
• On appeal, the Federal Fiscal Court found the consulting costs were part of the company’s general business expenses, allowing the input VAT deduction.

Source: news.bloombergtax.com

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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