Can I claim input tax if my company is based abroad?
June 6, 2024 | 40,00 EUR | answered by Phillip Buchner
Dear tax consultant,
My name is Georg Fuchs and I am the managing director of a small GmbH with its headquarters abroad. We operate in Germany and provide services here. Now I am wondering whether as an entrepreneur I can claim input tax, even though my company is not based in Germany.
Currently, we have regular income from our customers in Germany and also regularly incur expenses for our business on site. I have heard that it is possible to claim input tax even if the company is based abroad. However, I am unsure if this applies to my situation and how exactly I should proceed.
My concern is that I may be paying too much tax if I do not correctly claim the input tax. Therefore, it is very important for me to clarify whether and how I, as an entrepreneur with a company based abroad, can claim input tax in Germany.
Can you please help me and explain what requirements must be met in order to claim input tax? Are there specific forms or procedures that I need to follow? I would be very grateful for your assistance.
Sincerely,
Georg Fuchs
Dear Mr. Fuchs,
Thank you for your inquiry regarding the claiming of input tax as an entrepreneur with a company based abroad. I am pleased that you are addressing this issue and I will do my best to assist you with your concerns.
In general, it is possible for entrepreneurs to claim input tax, regardless of whether the company is based in the domestic or foreign territory. In your case, as the managing director of a GmbH based abroad providing services in Germany, you can also claim the input tax from your expenses incurred in Germany.
In order to correctly claim the input tax, certain requirements must be met. Firstly, it is important that your GmbH is liable for tax in the domestic territory. This means that you must pay value-added tax here. Since you provide services in Germany, you are generally subject to German value-added tax.
Furthermore, you must claim the input tax from the expenses incurred in Germany in accordance with the applicable provisions and regulations of the Value Added Tax Act (UStG) and the Value Added Tax Implementation Ordinance (UStDV). To do this, you must be able to present the corresponding invoices and receipts for the expenses incurred. These should be issued in the name of your GmbH.
In order to claim the input tax, you typically need to submit a VAT return to the tax office. In this VAT return, you declare the value-added tax charged to your customers, as well as the input tax from your expenses. The tax office will then review the information and potentially refund you the input tax.
It is important to comply with all legal requirements and deadlines when claiming input tax to avoid potential issues with the tax office. If you are unsure, I recommend seeking the assistance of an experienced tax advisor who can support you in this process.
I hope that this information has been helpful to you. If you have any further questions, please do not hesitate to contact me.
Best regards,
Phillip Buchner
