Can I deduct the value added tax for free services as well?
June 13, 2023 | 30,00 EUR | answered by Friedhelm Sauer
Dear tax advisor,
I am Georg Knorr and have a question regarding value added tax: Can I deduct the value added tax for free services as well?
Background information: I am a self-employed entrepreneur and offer both paid and free services to retain my customers and attract new ones. Of course, there are costs involved, for which I pay value added tax.
Current situation: So far, I have only deducted the value added tax for paid services and now I am wondering if I can also claim the costs for free services for tax purposes. I want to make sure that I take advantage of all opportunities to save on taxes.
My concerns: I am unsure if I can deduct the value added tax for free services and I am afraid of potentially missing out on tax benefits. It is important to me to pay my taxes correctly and not make any mistakes.
Possible solutions: I would like to know if and under what conditions I can deduct the value added tax for free services. If this is possible, I would like to know how to correctly report this in my tax return to avoid any issues with the tax authorities.
Thank you in advance for your help and advice.
Sincerely,
Georg Knorr
Dear Mr. Knorr,
Thank you for your question regarding value-added tax and the possibility of deducting it for free services. It is understandable that you want to explore all options for tax savings and ensure that you are correctly paying your taxes.
In principle, it is possible to deduct value-added tax for free services, provided that as a business owner you can claim input tax for the associated costs. This means that you can declare the value-added tax you pay for goods and services related to your free services as input tax in your VAT return.
However, you must bear in mind that you can only claim input tax if the free services are directly related to your business activities and are intended to generate revenue. Costs that serve purely private or gratuitous purposes cannot be claimed for tax purposes.
To correctly deduct the value-added tax for free services, you should carefully keep the relevant documents and declare them in your VAT return. It is advisable to seek professional help to avoid possible mistakes and issues with the tax authorities.
In summary, you can deduct value-added tax for free services as long as they are related to your business activities and intended to generate revenue. It is important to comply with the legal requirements and correctly declare the input tax.
I hope this information is helpful to you. I am available for further consultation.
Best regards,
Friedhelm Sauer
