Austria MOF Clarifies Input VAT Deductions on Apartments in Hotel Extensions Leased to Partners

The Austrian Federal Ministry of Finance March 18 posted online Federal Finance Court Decision No. RV/3100477/2019, clarifying input VAT deductions on apartments in hotel extensions leased to partners. The taxpayer, a hotel operator, constructed a hotel extension that included an apartment and sought clarification on whether input VAT was deductible, arguing that the apartment was temporarily rented out to his partner and was subject to VAT until used for tourist purposes. The Tax Office disallowed the deduction, classifying the apartment as being for private use. On appeal, the Federal Finance Court upheld the Tax Office’s decision, finding that: 1) the ...