The BFH ruling confirms that input tax can be deducted for the renovation of a historic castle even when financed by public grants and private donations, provided there is an entrepreneurial intent to generate taxable rental income. The decision clarifies that financing does not affect deduction, requires a clear allocation between private and taxable use, and mandates that the tax office determine the exact deductible share.
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NWB · 11 days ago
The German Federal Ministry of Finance (BMF) issued revised template forms for VAT reverse‑charge and registration purposes effective 9–23 April 2026. The updates remove the service‑seal field and the phrase “This letter was machine‑generated and is valid without signature,” and set a maximum validity of three years for the certificates. Forms USt 1 TH, USt 1 TG and USt 1 TQ can be issued on application or by authority; USt 1 TS and USt 1 TN only on application.
VatCalc · 12 days ago
Germany's Federal Ministry of Finance has issued a new guidance letter effective 1 April 2026 that narrows the scope of intra‑group VAT exemptions for Organschaft. The update expands situations where intra‑group transactions may trigger VAT, particularly for supplies linked to non‑economic activities, and allows taxpayers to use the old approach until 31 December 2026. Businesses must reassess charging models, input VAT recovery and ERP logic for German VAT groups.
VATCalc · about 1 month ago
ZUGFeRD 2.5 will be released on 20 May 2026 for Germany and France, adding native support for gross invoicing and aligning with the latest EN 16931 code lists. The update also expands reference templates for construction, leasing, reverse charge and simplified invoices, and reinforces cross‑border participation through an English version of the ZR framework.
Comarch · about 2 months ago
Germany has released new versions of its e‑invoicing standards, including Peppol, KoSIT, and ZUGFeRD, to improve cross‑border interoperability and simplify implementation. The updates introduce a Central Settlement (ZR) framework, gross invoice processing for specific sectors, and updated reference templates for various transaction types.
VATCalc · 2 months ago
Germany’s Federal Ministry of Finance updated its e-invoicing FAQs in March 2026, tightening the definition of a compliant E‑Rechnung. The guidance requires that 100 % of mandatory VAT data be embedded in structured XML, mandates embedding of supporting documents, and confirms that monthly summary invoices remain valid if the supply period is clearly defined. These clarifications signal enforcement intent ahead of the 2027 B2B e‑invoicing mandate and the 2030 EU Digital Reporting Requirements.
The Invoicing Hub · 2 months ago
Germany has launched the German Electronic Business Address (GEBA) standard, allowing every business to use a government‑assigned electronic address for Peppol. The GEBA specification, based on the automatically assigned W‑IdNr, is globally interoperable and supports optional sub‑addressing for large enterprises. The rollout is part of Germany’s e‑invoicing roadmap and aligns with upcoming EU e‑invoicing standards.
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Key Takeaways
The BFH states that financing via donations or subsidies does not affect the eligibility for input tax deduction.
Input tax is deductible if there is an entrepreneurial intent to generate taxable rental income, with a clear allocation between private use and taxable use, and the renovation is intended for taxable rental activities.
No, the BFH confirms that the lack of a profit motive does not preclude deduction; entrepreneurial activity is sufficient.
The tax office must determine the exact share of deductible input tax and any necessary adjustments if private use increases beyond the original plan.
Primary source
Read the full article at KMLZThis summary was published on VATfaqs.com on 10 January 2026. It relates to VAT developments in Germany. The original source is KMLZ.
