Example: Input Tax Correction
Starting Situation:
An office building is built.
In the year 2001, the building was planned as an office building. At that point in time, the planned commercial usage meant that a 100% input tax deduction was allowed.
For 2002, the new planned usage is for physicians' practices. Due to the (planned) non-commercial usage, it is no longer possible to deduct input tax for invoices with a date of service in 2002.
Total Sales Tax * |
Planned Usage |
Deducted Input Tax |
|
|---|---|---|---|
Year 2001 |
100,000 |
100% |
100,000 |
Year 2002 |
400,000 |
0% |
0 |
* The share of the usage that qualifies for the input tax deduction = option rate
II. Change in Circumstances:
Ultimately, only 40% of the spaces are rented to physicians, the rest are rented to commercial tenants. The building is used for the first time on January 1, 2003. The actual option rate, based on the usage, is now 60%.
The total amount of invoiced sales tax: 500,000
Original input tax deduction from 2001: 100,000
Input tax deduction up to now, as a percent: 100,000 / 500,000 = 20%
Per current usage as of 2003, deductible:60% = 300,000
III. Input Tax Correction:
Difference between original input tax deduction and input tax deduction per current usage:
300,000 - 100,000 = 200,000
Correction of input tax in year 2003 of EUR200,000 over 10 years= EUR 20,000 per year