Value-added tax on business closure and withdrawal
December 28, 2015 | 50,00 EUR | answered by Steuerberater Peter Jansen
According to the attached file, I also kindly request additional clarification and consideration of my detailed question regarding value added tax in relation to UstG §3 (1a) sentence 2, as I transferred my building unit from private to business assets 9 years after its construction. The input tax deduction was no longer possible for the initial acquisition cost; only for the aforementioned minor maintenance expenses.
Unfortunately, this situation was not fully addressed to me.
Dear questioner,
The question of the withdrawal value of a property in the context of a business cessation should be considered taking into account all personal and material circumstances. Only then can all aspects be legally secure and exhaustively addressed. This is a classic case of comprehensive tax advice. It is advisable to have the tax returns of the "cessation year" prepared by a tax advisor. After all, a cessation balance sheet must also be prepared. In my opinion, this internet platform is less suitable for this purpose. Feel free to contact me for further assistance.
However, I will try to answer your questions to the best of my ability within this framework. You will see that there is still some potential for problems.
Firstly, it appears that the portion of the property used for business purposes was not fully activated. Of course, the threshold of 20,500 euros must be considered. This threshold refers to the building part plus the corresponding land. Only the building portion has been activated so far. This raises the question of a balance sheet correction. If necessary business assets are not included in the balance sheet, a profit-neutral entry should be made in the first amendable tax year, with the value that the asset would have if correctly included in the balance sheet from the beginning. This seems less problematic, as no depreciation has been claimed for the land and the hidden reserves are likely to be limited.
In general, the market value appraisal that you have should be used as the basis for the withdrawal value. I cannot understand the justification for the 60,000 euro deduction you made. The reasons for this will need to be explained to the tax office. After all, this should have been taken into account in the appraisal.
From a tax perspective, it is important to note in your case that you have reached the age of 55. This means that you are entitled to the exemption under § 16 para. 4 EStG upon request. The cessation gain will only be subject to income tax if it exceeds 45,000 euros. Therefore, it is likely that this exemption could be sufficient in your case. Many statements regarding valuation are more of a "cosmetic" nature. Business tax will not be incurred in connection with a business cessation anyway.
Regarding value-added tax, it appears that the building was not assigned to the business assets, as no input tax deduction was claimed. Therefore, the withdrawal does not need to be treated as a taxable supply.
I hope I was able to help you further. If you still need additional assistance, I am available for a personal conversation.
Best regards,
Peter Jansen
