German extends deadline for submission of input VAT deductions

Mon 1st Oct 2012

In January 2012, the German VAT authorities tightened their policy on the allowance of VAT deductions on certain items.  Following this, they agreed to allow companies to continue to submit returns under the existing regime until April 2012.  However, this deadline has now been extended to December 2012.

The change centres on the mixed use of supplies for VAT and non-VAT supplies.  It makes a distinction between the use of supplies for business and non-business usage, and the right to allocate business use for deductions in VAT returns.