How do I proceed if I have mixed costs and only want to deduct part of the input tax?
June 9, 2023 | 40,00 EUR | answered by Roberta Schlattmann
Dear tax advisor,
My name is Fred Kock and I run a small business that has mixed costs. This means that some of my expenses are used both for business and personal purposes. I have now found out that I only want to deduct input tax partially, as I bear some of the expenses privately.
My concern now is how to best proceed in this situation. How can I correctly divide the mixed costs and only partially deduct the input tax accordingly? What options are available to handle this correctly and efficiently?
I am unsure whether I should simply divide the mixed costs based on a certain key or if there are specific regulations that I need to consider. I want to make sure that I do not make any mistakes and do not have any issues with the tax office.
Can you please explain to me the best way to proceed when I have mixed costs and only want to deduct input tax partially? What steps do I need to follow and what documentation is required to handle this correctly?
Thank you in advance for your help and support.
Sincerely,
Fred Kock
Dear Mr. Kock,
Thank you for your question regarding the correct treatment of mixed costs and the partial deduction of input tax in your company. It is important to proceed carefully in order to avoid issues with the tax authorities. I will now explain to you how you can best proceed.
First of all, it is important to note that mixed costs, which are costs used both for business and private purposes, can only be partially claimed as business expenses. This also applies to the input tax related to these expenses. In order to deduct the input tax correctly and efficiently only partially, you should divide the mixed costs accordingly.
There are various ways to divide the mixed costs. A common method is to divide them proportionally based on the ratio of business to private use. For example, you could determine that 70% of the costs are business-related and 30% are privately motivated, and accordingly claim the input tax only for the business portion.
Another possibility is to divide the costs based on objective criteria such as usage times or areas. However, you should ensure that the division is comprehensible and verifiable in order to avoid possible inquiries from the tax authorities.
To properly manage the partial deduction of input tax, you should carefully keep and document all relevant receipts and documents. These include invoices, contracts, or travel logs that show how the mixed costs were divided.
It is also advisable to seek advice from a tax advisor when dividing mixed costs to ensure that you are doing everything correctly and avoid making mistakes.
I hope this information helps you and that you now have a better understanding of how to proceed when you have mixed costs and want to deduct the input tax partially.
If you have any further questions or need assistance, I am happy to help.
Sincerely,
Roberta Schlattmann
