GlossaryEN1 min readUpdated: Jun 18, 2026

input tax apportionment

Input tax apportionment becomes necessary as soon as a business generates both taxable and exempt supplies and receives goods or services used for both activities.

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Last updated: 18 June 2026Published: 27 January 2026

Source: https://de.wikipedia.org/wiki/Vorsteuer

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Definition & Explanation

Input tax apportionment becomes necessary as soon as a business generates both taxable and exempt supplies and receives goods or services used for both activities. The total input tax is split using a suitable allocation key – most commonly a turnover-based pro-rata ratio – to separate the deductible share from the non-deductible share. Only the portion attributable to taxable output may be reclaimed from the tax authority. The chosen key must be consistently applied, clearly documented, and reviewed at regular intervals, typically once a year. A significant shift in the revenue mix may require an interim revision of the ratio.

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input tax apportionment

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