Austria MOF Clarifies Input VAT Deductions, Income Classification Regarding Luxury Holiday Rentals

The Austrian Federal Ministry of Finance July 10 posted online Federal Finance Court Decision No. RV/3100261/2024, clarifying input VAT deductions and income classification regarding luxury holiday rentals. The taxpayer, an individual, rented out four upscale residential units as holiday accommodations. The taxpayer sought an input VAT deduction for the applicable paneling costs regarding his private residence and sought to classify the income earned as business income. The Tax Office denied the input VAT deduction and contended that there wasn’t case law on how the specific use of labor influences the classification of income. On appeal, the Federal Finance Court found ...