Can I deduct input tax for purchases made from private assets?
October 19, 2022 | 40,00 EUR | answered by Roberta Schlattmann
Dear Mr. Wolf,
I have a question regarding input tax: Can I deduct input tax for purchases made from personal assets?
The background is as follows: I am self-employed and have recently made some purchases that are used both for my business and for personal use. Examples include a new smartphone that I use for both work and personal use, as well as a home office that is also used for private purposes. Now I am wondering if I can deduct the input tax for these purchases, even if they were financed from my personal assets.
My concern is that I may be missing out on input tax amounts that I may be entitled to. I want to ensure that I take full advantage of all opportunities for input tax deduction and minimize my tax burden. At the same time, I do not want to take any risks and potentially get into tax difficulties.
Could you please explain to me if it is possible to deduct input tax for purchases made from personal assets? Are there specific requirements that must be met in order to claim the input tax? What steps do I need to take to ensure that I deduct the input tax correctly?
Thank you in advance for your support and advice.
Kind regards,
Fred Wolf
Dear Mr. Wolf,
Thank you for your question regarding input tax and whether it can be deducted for purchases made from personal assets. This is an important aspect that is relevant for many self-employed individuals who make purchases for both business and personal use.
In general, it is possible to deduct input tax for purchases from personal assets, as long as they are used for both business and private purposes. In your case, with the example of the new smartphone used for both work and personal reasons, as well as the home office used for private purposes, you could potentially deduct the input tax.
However, there are certain requirements that must be met in order to deduct the input tax. Firstly, the purchases must actually be used for business purposes. This means you must prove that the purchases are actually used for your business and not just for personal reasons.
Furthermore, you must prove that the purchases were actually financed from your personal assets. This can be done, for example, through relevant invoices and payment receipts showing that the purchases were made personally.
To ensure that you correctly deduct the input tax, it is advisable to carefully keep all relevant receipts and proofs. This includes invoices, payment receipts, contracts, and other documents showing that the purchases were intended for your business and financed from your personal assets.
In such cases, it is advisable to seek advice from a tax advisor to ensure compliance with all tax regulations and to maximize your input tax deduction entitlement. A professional tax advisor can help you minimize potential risks and optimize your tax burden.
I hope this information helps. Please feel free to contact me with any further questions.
Best regards,
Roberta Schlattmann
