Input Tax Deduction Before Transition to Standard or Small Business VAT Scheme Under § 19 UStG

• The BMF letter from 10.11.2025 addresses input tax deduction for services received before a business transitions to standard taxation or the small business regulation under § 19 UStG.
• The 2024 Annual Tax Act revised the small business regulation to align with EU law, effective from 1.1.2025.
• Input tax deduction is excluded for periods before the transition to standard taxation, even if the transition is likely but not yet actual.
• The BMF has updated the VAT Application Decree (UStAE) accordingly.

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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