Austria MOF Clarifies Input VAT Deduction Rules for Apartment Rentals

The Austrian Federal Ministry of Finance Jan. 20 posted Federal Finance Court Decision RV/5100218/2025, clarifying the input VAT deduction rules for apartment rentals. The taxpayer, an individual, constructed a building and claimed input VAT on invoices from a wholly owned subsidiary. The subsidiary didn’t pay the invoiced VAT the taxpayer sought to deduct, and the taxpayer failed to objectively show a taxable rental use or waive the small business exemption. The Tax Office denied the input VAT deduction. On appeal, the Federal Finance Court found that: 1) input VAT deductions for apartment rentals require a clear, externally verifiable intention to ...