- If a down payment for a service not rendered is partially refunded to the entrepreneur, the input VAT deduction must be partially corrected, even if the refund is made by a third party (e.g., a guarantor).
- The refunded amount must be split into net payment and VAT, even if the guarantee only covers the net amount.
- The plaintiff’s appeal against the lower court’s decision was dismissed as unfounded; the plaintiff must bear the costs.
- The tax office was correct in requiring a correction of the input VAT deduction after the guarantee payment by the bank, as this changed the taxable base between the plaintiff and the supplier.
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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