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  Input Tax Processing

Purpose

This component supports input tax processing according to German law ( preemptive right on sales tax):

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 has to be:

  • distributed to private usage, in the case of apportionable acquisition/production costs

  • activated, in the case of expenses subject to activation in Asset Accounting (FI-AA). Changes in the usage of the asset lead to corrections in Asset Accounting according to German law.

Implementation Considerations

Install this component if you want to reduce your tax burden resulting from the business processes of rental and leasing of real estate according to German law.

Integration

You have to install the Asset Accounting (FI-AA) component to be able to use this component.

Features

The system calculates the deductible and non-deductible input tax portions by means of an input tax distribution process that is carried out monthly due to the changing financial situation of real estate objects.

The financial conditions are determined by the comparing of the commercial/input tax for opting rental with the total rental: an automatic determination of the financial conditions using the areas or cubic volume is possible as well as a manual entry.

Since vacant rental units can also be considered as an option, input tax processing can be adapted to the individual business processes of your organization.