GlossaryEN1 min readUpdated: Jul 10, 2025

Input VAT deduction

Input VAT deduction is a tax mechanism allowing a business to deduct the value-added tax (VAT) paid on its purchases (input tax) from the VAT it is required to remit to tax authorities.

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Last updated: 10 July 2025Published: 19 June 2025

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

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Right to deduct input tax

A typical case: an importer receives an invoice for €10,000 plus €1,900 input VAT. The business can claim this €1,900 input VAT if…

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restriction/limitation of the right to deduct input tax (VAT)

Unlike a full exclusion or loss of the deduction right, restriction of the right to deduct input tax (VAT) limits the recoverable …

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denial of input tax refund

An input tax refund denial is the substantive decision by the tax authority rejecting a claim for VAT recovery or input tax deduct…

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Transfer of input tax credit entitlement

Input tax credit transfer allows a taxable person to transfer the right to deduct input VAT to another taxable person. This typica…

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input tax mechanism

The input tax mechanism comes into play whenever a VAT-registered business buys and sells goods or services: VAT paid on purchases…

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prescription of the input tax claim

Prescription of the input tax claim sets the statutory time limit within which a business must recover input VAT from the tax auth…

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Input VAT deduction

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Related Terms

Right to deduct input tax

restriction/limitation of the right to deduct input tax (VAT)

denial of input tax refund

Transfer of input tax credit entitlement

input tax mechanism

prescription of the input tax claim

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