Building on someone else's property
July 30, 2010 | 30,00 EUR | answered by StB Olaf Gayko
Hello!
Since March 2010, I have been self-employed as a freelancer. Since April, my husband and I have been building office spaces for my professional activities at our single-family home. The property is owned by my husband. I have claimed the input tax from the previous construction services and invoices related to the construction site in my monthly VAT return. There are difficulties arising with the tax office due to these ownership conditions. How should we proceed in order to successfully claim the input tax for the new construction? Would it be sufficient, for example, if I claim economic ownership of the office spaces?
Thank you very much for your efforts!
Dear questioner,
First of all, thank you for your inquiry, which I would be happy to answer based on the information you provided and in the context of your initial consultation.
The response is based on the description of the situation. Missing or incorrect information about the actual circumstances can affect the legal outcome.
In order for the tax office to recognize the input tax as deductible, the independently usable part of the property (office) should be included in the VAT business assets.
You can document this, for example, by activating the proportional acquisition costs/construction costs of the office in the balance sheet/profit and loss statement. Then there should be no more issues with the proportional input tax deduction.
Make sure that the invoices are in your name. There may be a special provision to consider under § 15a UStG when ending the self-employment (within 5 or 10 years).
I hope this helps.
Sincerely,
Olaf Gayko
Tax advisor
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