Example: Final Input Tax Distribution
20% of a building is rented out to commercial tenants (subject to tax) and 80% is rented out to private persons (exempt from tax). This means that 20% of the input tax from the paid cost documents for this building can be deducted from the sales tax (deductible input tax). The option rate for this building is therefore 20%.
- In Financial Accounting, an incoming invoice was posted for EUR 7250 heating expenses (including 16% sales/purchases tax).
- Only 20% (option rate) of the EUR 1000 input tax (that is, EUR 200) is deductible for the advance return for sales tax. The input tax distribution posts the non-deductible part of the input tax (EUR 800 in our example) to an account for non-deductible input tax.
