Option Rate Determination and Input Tax Distribution
Purpose
For mixed rentals (commercial/residential) it is necessary to separate the input tax on incoming postings into non-deductible and deductible amounts.
Whereas deductible input tax can be balanced against output tax, non-deductible input tax can be assigned as follows:
To settlement units (in the case of costs that can be apportioned to the tenant)
To the real estate objects where they originate (in the case of non-apportionable costs that do not have to be capitalized)
This component assists you in calculating the deductible and non-deductible portion of input tax ( Input Tax Distribution ) on the basis of the option rate ( Option Rate Determination ).
Features
Option rate determination and input tax distribution are carried out on a monthly basis due to the changing financial situation of real estate objects.
The financial conditions are determined by comparing the rental units that opt for input tax (commercial rental) with the total rental, whereby automatic determination using spaces or cubic volume can be used as well as manual entry.
Note
If the basic factors for an input tax deduction change after the deduction was already made, then German tax law requires that you correct the originally deducted input tax within a set time period. This is regulated by paragraph 15a of German sales tax law . For more information, see the information on the country-specific functions for Germany related to input tax correction .