New VAT Rules for Deficit-Financed Public Facilities: Key Changes on Subsidies and Input Tax Deduction

• The BMF clarified VAT rules for permanently loss-making institutions receiving public subsidies.
• Permanent deficits do not automatically exclude economic activity or input tax deduction.
• Subsidies are only taxable if directly linked to a specific service.
• The new UStAE system simplifies legal classification for operators.
• The updated guidelines provide more legal certainty for cultural, sports, public transport, and social institutions.

Source: roedl.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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