How do I calculate the input tax if I have assets used for both business and personal purposes?
August 1, 2022 | 30,00 EUR | answered by Marco Schottmann
Dear tax consultant,
I have a question regarding the calculation of input tax in relation to mixed-use assets. In my company, I use some assets for both business and personal purposes. I am unsure of how to correctly calculate the input tax in this case and want to ensure that I do not make any mistakes.
Currently, I keep regular records of my expenses and income in order to correctly prepare my VAT return. However, I am unsure about how to determine the input tax for mixed-use assets. I am concerned that I may be claiming too much or too little input tax, leading to potential tax disadvantages.
Could you please explain to me how to correctly calculate the input tax for mixed-use assets? Are there specific calculation methods or guidelines that I should follow? Or are there perhaps software solutions that can assist me in accurately determining the input tax?
I thank you in advance for your assistance and look forward to your helpful tips and advice.
Kind regards,
Martina Binder
Dear Mrs. Binder,
Thank you for your question regarding input tax on mixed-use assets. Calculating input tax correctly for mixed-use assets can indeed be a challenge, as both private and business use need to be taken into account. It is important to determine input tax correctly to avoid any tax disadvantages.
There are various methods to calculate input tax for mixed-use assets. One option is to allocate the input tax based on the ratio of business to private use. In this method, the input tax is determined according to the proportion of business use to the total use of the asset. This method requires accurate documentation of usage and can therefore be somewhat time-consuming.
Another option is the flat-rate input tax calculation. In this method, a flat-rate input tax rate is applied for business use, regardless of the actual usage of the asset. This method may be simpler, but carries the risk of potentially not capturing input tax correctly.
It is important to choose the method that is suitable for your company to calculate input tax and apply it consistently. Accurate documentation of asset usage is essential to be able to demonstrate how input tax was determined in case of a tax audit.
If you are unsure how to correctly calculate input tax for mixed-use assets, I recommend consulting a tax advisor. A tax advisor can help you find the method that is right for your company and ensure that you do not suffer any tax disadvantages.
There are also software solutions that can assist you in calculating input tax. These programs allow you to easily and accurately determine input tax and often provide support in documenting asset usage.
I hope that my answer was helpful to you. If you have any further questions or need assistance, I am at your disposal.
Best regards,
Marco Schottmann
Tax Advisor
