How can I claim input tax?
June 25, 2024 | 40,00 EUR | answered by Friedhelm Sauer
Dear tax advisor,
I am Lilli Maier and I operate a small business in the online trading sector. Lately, I have been closely studying the topic of value-added tax and came across the term input tax. When I tried to claim input tax, I encountered some difficulties and am unsure if I am doing everything correctly.
Currently, I am handling my own accounting and I am not certain if I have correctly recorded all invoices in order to claim input tax correctly. I have heard that there are different conditions that need to be met in order to deduct input tax, and I would like to know from you what these are and if my current approach meets the requirements.
Furthermore, I am concerned that I may have made mistakes in recording input tax and that this could lead to financial disadvantages. Therefore, it is very important for me to know how I can ensure that I claim input tax correctly and avoid making mistakes that could be detrimental to me in the future.
Could you please explain in detail how I can claim input tax, what conditions need to be met, and how I can optimize my accounting to avoid potential errors?
Thank you in advance for your help.
Best regards,
Lilli Maier
Dear Mrs. Maier,
Thank you for your inquiry regarding input tax in connection with value added tax. It is very important that you familiarize yourself with this topic, as the correct booking of input tax can be financially crucial for your company. I would be happy to explain to you in detail how you can claim input tax and what requirements you should pay attention to.
In order to deduct input tax, certain conditions must be met. Firstly, the input tax must be shown on a proper invoice. This means that the invoice must contain all the necessary information according to legal requirements. This includes the name and address of the supplying company, your own company address, the date of issue, the quantity and type of goods delivered or services provided, as well as the amount of VAT and the total amount. Make sure that you can only claim input tax that is shown on such proper invoices.
Furthermore, the incoming invoices must be correctly booked in your accounting system. This means that you must assign the invoices to the appropriate accounts in order to correctly record the input tax. It is important to book the input tax separately from other expenses in order to keep a clear overview of your input tax amounts. Also, ensure that you regularly and completely report the input tax amounts in your VAT return.
To avoid possible errors in booking input tax, I recommend that you regularly review your accounting. Conduct a systematic check of your incoming invoices and compare them with the booked amounts. Also, make sure that you do not claim input tax that is not deductible, for example, if it is related to private expenses. If you are unsure whether you have correctly booked the input tax, I recommend seeking support from a tax advisor.
Lastly, I want to emphasize how important it is to correctly claim input tax in order to avoid financial disadvantages. Therefore, make sure to meet the above-mentioned requirements and keep your accounting records carefully. If you have any further questions or uncertainties, I am happy to assist you.
Best regards,
Friedhelm Sauer
Tax Advisor
