No Input Tax Deduction for Tax Advisory Costs in Gifted Limited Partnership Shares

• A GmbH & Co. KG cannot deduct input VAT on tax-advisory costs for a business valuation and filing a valuation statement when the trigger was a private gift transfer of limited partnership shares.
• The tax office wrongly treated the payment of the advisory invoice as an unentgeltliche Wertabgabe, but the court said no such taxable deemed supply existed.
• Input VAT deduction was denied because there was no direct link between the advisory costs and the company’s taxable output transactions.
• The costs were not considered general business overhead either, since they arose from a privately motivated share gift, not from the company’s entrepreneurial activity.
• The case is on appeal before the Federal Fiscal Court (BFH).

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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