How can I claim input tax?
January 15, 2024 | 40,00 EUR | answered by Günther Hering
Dear Tax Advisor,
My name is Piotr Vollbrecht and I run a small business that deals with the sale of electronics. Lately, I have noticed that the amounts of VAT I pay for my purchases make up a significant portion of my budget. I am wondering how I can claim input tax in order to reduce the burden on my company.
So far, I have not delved deeply into the topic of input tax and am therefore unsure of how to proceed. I have read that there are various ways to claim input tax, but I lack the necessary knowledge to do so correctly.
I am concerned that I may be giving away money by not correctly claiming input tax. Therefore, it would be important for me to know the specific steps I need to take in order to correctly deduct input tax.
Can you please explain to me how I can claim input tax and what requirements need to be met? Are there specific deadlines or forms that I need to pay attention to? I would be very grateful for your support and expertise.
Thank you in advance.
Sincerely,
Piotr Vollbrecht
Dear Mr. Vollbrecht,
Thank you for your inquiry regarding claiming input tax for your company that sells electronic products. Input tax is the sales tax that you pay for your purchases of goods and services. As a business owner, you can deduct this from the sales tax you charge on your own products or services, thereby reducing the tax burden for your company.
To claim input tax, certain conditions must be met. First of all, you must be a business owner in possession of a valid VAT identification number, which you can obtain from the relevant tax office. Additionally, the goods or services for which you want to deduct the input tax must be used for your business. Private purchases are not eligible for input tax deduction.
You must also have proper invoices that contain all legally required information. This includes the name and address of the supplying company, your VAT identification number, the date of invoice issuance, a unique invoice number, the quantity and type of products delivered or services provided, and the specified amount of VAT.
To claim input tax, you must declare it in your VAT return. There, you enter both the sales tax you have received from your customers and the input tax you have paid for your purchases. The difference between input tax and sales tax is then either refunded to you or must be paid.
It is important to adhere to the deadlines for submitting your VAT return, which are usually quarterly or monthly. Failure to meet the deadline may result in penalties from the tax office.
I recommend contacting a tax advisor to ensure that you comply with all regulations and make optimal use of input tax. A tax advisor can also help you identify potential savings opportunities and minimize tax risks.
I hope this information is helpful to you and I am available for any further questions. Thank you for your trust.
Sincerely,
Günther Hering
