Deduction of VAT for residential-commercial property
September 15, 2010 | 30,00 EUR | answered by Matthias Wander
Hello, we are planning a new building with commercial and residential spaces. It includes a separate photo studio of 25sqm and a 50sqm exhibition and consulting area where photo shoots also take place. However, this space is also used privately as a living room. Please refer to the attachment for the layout.
Here is my question:
Which costs (listed in the PDF) of the new building can be deducted for tax purposes?
Land: €45,000
House: €100,000 including foundation, architect costs, etc.
Interior: €20,000 electrical system, flooring, wallpaper, etc.
The photo studio is a sole proprietorship.
Thank you.
Dear Seeker,
Thank you for your inquiry, which I would like to answer based on your information and in the context of your commitment within the scope of an initial consultation.
First of all, I would like to inform you that I am unable to access the data you have sent in the attachment. However, you can also send me the data by email if needed.
The determination of deductible input tax amounts is done in 2 steps.
In the first step, expenses are directly allocated to the assets "privately used residential premises" and "photo studio" as far as possible. The input tax attributable to the expenses is then either fully or not deductible at all.
In the second step, the input tax amounts on expenses that could not be directly allocated to the assets are divided based on the ratio of the areas used. It should be noted that the living room is completely allocated to the private area, as the division ban applies here. Only for rooms used exclusively for the photo studio can the input tax be deducted.
The deduction of input tax requires that taxable income is generated with the photo studio.
I hope this gives you an initial overview.
Best regards,
Wander
Tax consultant
