GlossaryEN1 min readUpdated: Jun 12, 2026

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

Input tax deduction limitation differs from exemption or loss: it sets a ceiling on the maximum input VAT that may be claimed when business activities are only partly subject to VAT.

Last updated: 12 June 2026Published: 27 January 2026

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

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Input tax deduction limitation differs from exemption or loss: it sets a ceiling on the maximum input VAT that may be claimed when business activities are only partly subject to VAT. In cases of mixed activities (e.g., a freight forwarder providing both taxable and exempt services), proportional deduction is often required. The deductible amount is calculated using a statutory or administrative apportionment key (such as turnover ratio) to ensure only input VAT attributable to taxable supplies is recovered.

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

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Related Terms

Right to deduct input tax

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