GlossaryEN1 min readUpdated: Jun 18, 2026

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 amount to the share attributable to taxable supplies.

Quick Answer

Last updated: 18 June 2026Published: 27 January 2026

Source: https://www.gesetze-im-internet.de/ustg_1980/__15.html

Category

Logistics Concept

Reading time

1 min

Words

108

Mentioned in

–

Definition & Explanation

Unlike a full exclusion or loss of the deduction right, restriction of the right to deduct input tax (VAT) limits the recoverable amount to the share attributable to taxable supplies. It applies when a business carries out both taxable and VAT-exempt activities—commonly described as mixed-use or partially exempt status. The deductible proportion is determined by a statutory or administratively agreed apportionment key, most often a turnover-based pro-rata ratio. In freight forwarding and logistics, this situation arises when a company combines standard-rated transport services with VAT-exempt activities such as certain insurance or financial intermediation services. The applicable pro-rata rate must typically be reviewed and recalculated on an annual basis.

Next steps

Matching tools and partners

Check transport insuranceEstimate coverage and premiumOpen Find HS codeDetermine the tariff number for customsOpen Calculate customs valueWork out import duties and customs valueOpen Find a matching partnerFreight forwarders and logistics partners worldwideOpen

Related Terms

You might also be interested in these terms

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…

Learn more

retroactive claim for input tax entitlement

A retroactive claim for input tax entitlement is the subsequent assertion or correction of the right to deduct input VAT, brought …

Learn more

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 …

Learn more

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…

Learn more

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…

Learn more

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…

Learn more

Logistics knowledge straight to your inbox

Free · No password · Never a paywall. Weekly top news and facts from logistics.

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

Next steps

Related Terms

Right to deduct input tax

retroactive claim for input tax entitlement

Restriction on input VAT deduction

denial of input tax refund

Transfer of input tax credit entitlement

prescription of the input tax claim

Logistics knowledge straight to your inbox

Community Questions & Answers