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Restriction on input VAT deduction | Freight-Academy™

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GlossaryEN1 min readUpdated: Jun 19, 2026

Restriction on input VAT deduction

Restrictions on input VAT deduction come into play as soon as a business performs both taxable and exempt supplies or uses assets for mixed purposes: the right to deduct is not eliminated, but capped at the taxable proportion or deferred over time.

Quick Answer

Restrictions on input VAT deduction come into play as soon as a business performs both taxable and exempt supplies or uses assets for mixed purposes: the right to deduct is not eliminated, but capped…

Common triggers include vehicles or buildings serving mixed purposes, or freight forwarders that combine taxable transport services with exempt financial intermediation.

The restriction is typically applied on a pro-rata basis — calculated from the ratio of taxable to total turnover — and must be reviewed periodically.

Last updated: 19 June 2026Published: 27 January 2026

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

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Restriction on input VAT deduction

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Definition & Explanation

Restrictions on input VAT deduction come into play as soon as a business performs both taxable and exempt supplies or uses assets for mixed purposes: the right to deduct is not eliminated, but capped at the taxable proportion or deferred over time. Common triggers include vehicles or buildings serving mixed purposes, or freight forwarders that combine taxable transport services with exempt financial intermediation. The restriction is typically applied on a pro-rata basis — calculated from the ratio of taxable to total turnover — and must be reviewed periodically. Unlike a full input VAT prohibition, the deduction right itself survives; it is curtailed, not removed.

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Recommended format: Source: Freight Academy – Restriction on input VAT deduction (https://www.freight-academy.com/en/glossary/restriction-on-input-vat-deduction), accessed 2026-09-29
APA style: Freight Academy Editorial Team. (2026). Restriction on input VAT deduction. Freight Academy. https://www.freight-academy.com/en/glossary/restriction-on-input-vat-deduction
BibTeX: @misc{restrictiononinput2026, title = {Restriction on input VAT deduction}, author = {{Freight Academy Editorial Team}}, year = {2026}, url = {https://www.freight-academy.com/en/glossary/restriction-on-input-vat-deduction}, note = {Freight Academy, accessed 2026-09-29} }

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