- The German Ministry of Finance clarified input VAT deduction rules for subsidized service providers operating at a persistent loss.
- Such providers cannot deduct input VAT if the input services are unrelated to taxable activity.
- Eligibility for input VAT deductions requires a two-step test: a direct link between remuneration and performance, and the existence of economic activity.
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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