VAT'S IMPORTANT - NEWSLETTER 2023 - 06
NEWSLETTER 2023 - 06
Input tax deduction and own use vehicles
The Swiss Federal Administrative Court defindes the above in its ruling
of September 13, 2023 (A-4948 / 2023)
WHAT IS IT ABOUT?
The appellant had deducted input tax in connection with the purchase or leasing of various vehicles. According to the SFTA, however, these vehicles were made available to the shareholder and sole shareholder for own use, which is why the SFTA refused to declare the input tax.
KEY MESSAGE OF THE COURT RULING OF SEPTEMBER 13, 2023 - A - 4948 / 2023
According to the court's ruling, it must be examined whether these vehicles were "made available" for own use. According to the FAC, in view of the vehicles in dispute and the total of around 100,000 kilometers driven per year, it is no longer possible to speak of a "movement" in order to prevent damage to the respective vehicles. Furthermore, the shareholder had personally driven the said kilometers, which tended towards 100,000. The court therefore came to the conclusion that the Swiss tax administration's view could not be objected that the very high ("enormous") travel costs and expense receipts for trips to various countries amounting to around CHF 24,000 per year were of a own nature, as the actual business activity (property rental, vehicle trading) did not justify such high costs. In addition, the shareholder had personally driven the aforementioned kilometers, which tended towards 100,000. This means that the shareholder used the disputed vehicles intensively, which necessarily presupposes their frequent or permanent availability.
The court therefore came to the conclusion that there was no vehicle trade; input tax could not be claimed back.
CONCLUSION
Own use is never an exchange of supplies. Own use exists, for example, if goods or services are permanently or temporarily removed from the business. This therefore always results in an input tax correction. The input tax correction is intended to prevent a taxable person who uses goods or services outside of their business activity - in particular for own purposes - from being placed in a better tax position than a non-taxable person. Early clarification helps to avoid costly charges later on. We from the terraVAT team are happy to help.
If you have any questions, please do not hesitate to contact us.
Your terraVAT team is happy to assist.
We wish all readers a Merry Christmas 2023 and a great start into the year 2024
With best regards
Your terraVAT Team
Sabrina Frey Florian Hanslik
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