How does the input tax deduction entitlement work for items used for mixed purposes?
August 9, 2023 | 40,00 EUR | answered by Phillip Buchner
Dear tax advisor,
I have a question regarding input tax deduction entitlement for items used for both business and personal purposes. I run a small business and use some items for both business and personal use. So far, I have never been sure how to deduct the input tax for these items.
Currently, I am unsure of how to proceed and whether I may be in violation of tax regulations. I want to make sure that I deduct the input tax correctly and do not encounter any issues with the tax office.
Could you please explain to me how the input tax deduction entitlement works for items used for both business and personal purposes? Are there any specific regulations I need to adhere to? What documentation is required to make the input tax deduction traceable?
I would greatly appreciate your assistance in ensuring that I can properly and compliantly handle my tax affairs.
Thank you in advance.
Best regards,
Roberta Maier
Dear Mrs. Maier,
Thank you for your question regarding the input tax deduction eligibility for items used for mixed purposes. It is understandable that you are unsure about how to proceed in order to avoid any tax-related issues. I will now explain in detail how the input tax deduction for items used for mixed purposes works and what regulations you need to follow.
In general, if you use items for both business and private purposes, you can only deduct the input tax proportionally. Input tax is only deductible for expenses related to business activities. In order to correctly claim the input tax deduction, you must be able to prove the usage of the item for business purposes.
There are various methods to deduct input tax for items used for mixed purposes. One option is to allocate based on objective criteria such as area or period of use. Another option is to allocate based on estimated proportions if an objective allocation is not possible. It is important that the allocation is understandable and documented.
To make the input tax deduction understandable, you must label the items used for mixed purposes in your accounting and document the allocation of usage. For example, you can keep a logbook or make a temporal allocation. This documentation is important to be able to prove, in case of an audit by the tax authorities, that the input tax deduction was done correctly.
It is crucial to deduct the input tax correctly in order to avoid tax-related issues. If you are unsure about how to proceed with items used for mixed purposes, I recommend seeking advice from a tax advisor who can assist you in the proper handling.
I hope this information is helpful to you and that you can manage your tax affairs correctly. If you have any further questions, please feel free to contact me.
Best regards,
Phillip Buchner
