Austria MOF Clarifies Input VAT Deductions on Test Vehicles

The Austrian Federal Ministry of Finance Aug. 6 posted Federal Finance Court Decision No. RV/5100843/2024, clarifying input VAT deductions on test vehicles. The taxpayer, an engine manufacturing plant within a group, claimed input VAT deductions for the rental and operation of test vehicles used exclusively for engine development. The Tax Office didn’t recognize the deduction, contending that the essential characteristic of such vehicles didn’t allow for input VAT deductions. On appeal, the Federal Finance Court found that: 1) the test vehicles were frequently modified with equipment, making them distinct from production vehicles; 2) the test vehicles lacked the essential characteristics ...