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geistliche Genossenschaft

Glossary entry

German term or phrase:

Vorsteuerabzugskürzung vornehmen

English translation:

reduce the input tax deduction

Added to glossary by Kim Metzger
Feb 1, 2009 14:34
15 yrs ago
German term

Vorsteuerabzugskürzung vornehmen

German to English Bus/Financial Law: Taxation & Customs Swiss insolvency procedures
A Vorsteuerabzug is an input tax deduction. Would "Vorsteuerabzugskürzung vornehmen" be to "take" a reduction in the input tax deduction"? If so, can someone explain roughly what that means?

Bei einer optimal durchgeführten Sanierung wird die Emissionsabgabe erlassen, kann der Verlustvortrag steuerlich weiterhin geltend gemacht werden, fällt keine Ver-rechnungssteuer an und es muss auch keine Vorsteuerabzugskürzung vorgenommen werden.
Proposed translations (English)
4 +4 reduction in/reduced input tax deduction
4 restriction of input tax
3 deduction of input tax

Discussion

Jo Bennett Feb 2, 2009:
Steuerlexikon definition of Vorsteuer For anyone still uncertain about VAT/input tax, there's a good concise definition of Vorsteuer in the Steuerlexikon at www.steuerlexikon-online.de/Vorsteuer.html: "Als Vorsteuer wird die Umsatzsteuer bezeichnet, die einem Unternehmer beim Erwerb von Lieferungen oder sonstigen Leistungen in Rechnung gestellt wird. Die in Rechnung gestellte Umsatzsteuer können Unternehmer mit der Umsatzsteuer, die sie auf ihre Lieferungen oder sonstigen Leistungen erheben müssen, verrechnen (Vorsteuerabzug). Dies geschieht im Rahmen der Umsatzsteuervoranmeldung."
Kim Metzger (asker) Feb 1, 2009:
reduced input tax credit? What is a ‘Reduced Input Tax Credit’?
In other jurisdictions such as New Zealand, Canada and the United Kingdom, a broader range of supplies are input taxed (or ‘exempt’) in the same manner as a financial supply, such as the provision of agency services in respect of a financial supply.... When those acquisitions are reduced credit acquisitions the entity is entitled to a reduced input tax credit. The amount of the credit is not the full amount of the GST paid in respect of the acquisitions, but a specified percentage of it.
http://www.mallesons.com/publications/Financial_Services_Law...
Kim Metzger (asker) Feb 1, 2009:
As quoted by Ralf Lemster: If your customers are registered for VAT and the supplies are for their business, the supplies are their inputs and the tax you charge them is their input tax. In the same way, the VAT charged by suppliers to you on your business purchases is your input tax. http://www.proz.com/kudoz/german_to_english/bus_financial/14...
Martin Wenzel Feb 1, 2009:
I am gonna dump this Langenscheidt dictionary! Input sounded very strange, I must admit
Martin Wenzel Feb 1, 2009:
prepaid deduction of prepaid VAT
Edith Kelly Feb 1, 2009:
IMO Vorsteuer is value added tax and not input tax, though Schäfer and Langenscheidt both give input tax. Vorsteuerabzug: IMO value added tax deduction. And Kürzung = reduction.

Proposed translations

+4
2 hrs
Selected

reduction in/reduced input tax deduction

Hi Kim,

You're right on both counts:

1) Of course Vorsteuer is "input tax", not "value added tax". Note to EdithK: input tax is the VAT you pay to suppliers (Vorsteuer in German), while VAT (technically "output tax") is what you charge to your own customers (German Umsatzsteuer, commonly Mehrwertsteuer).

2) The Kürzung here really is a reduction, the point being that - depending on a number of factors - the amount of input tax may be reduced by tax rules, which is a bad thing, because then you've got less to deduct from your VAT/output tax.

Note to Martin: This is actually one of the relatively few occasions when the Langenscheidt dictionary is correct, but that's no excuse for holding on to it :-)
And BTW, "prepaid VAT" is something entirely different - this is the amount that eligible entities in Germany can (pre)pay at the beginning of each tax year so that they then make their regular VAT payments (confusingly called "USt-Vorauszahlungen" in German!) one month in arrears, rather than within the first 10 days of the following month.

--------------------------------------------------
Note added at 2 hrs (2009-02-01 16:41:54 GMT)
--------------------------------------------------

Note to Kim: "input tax credit" is the standard term in countries with a GST system (e.g. Canada, Australia, NZ), rather than VAT (though these are essentially identical except for the terminology).

--------------------------------------------------
Note added at 2 hrs (2009-02-01 17:04:19 GMT)
--------------------------------------------------

Oh, right, the actual question itself :-)

I think I'd tend to say "and input tax deduction is not reduced". But that depends on what you've written for the first part of the sentence.
Note from asker:
vornehmen - So "muss keine Vorsteuerabzugskürzung vorgenommen werden" could be "no reduced input tax deduction need be applied"?
Peer comment(s):
neutral Edith Kelly : well, I have to pay Vorsteuer living in Germany, and ... unfortunately... this is value added tax. Maybe Kim can tell us the country he is talking about.
1 hr
Well Edith, unfortunately Vorsteuer *is* "input tax", even here in Germany. In fact, it's input tax in every country with a VAT system, i.e. including all EU member states. Details e.g. here: http://www.hmrc.gov.uk/vat/vat-introduction.htm.
agree Steffen Walter : While Edith's comment is "technically" correct, the term of art for this "sub-type" of VAT is still "input tax" :-)
2 hrs
I have to disagree that Edith's comment is correct, even "technically". Vorsteuer is only ever "input tax" in a VAT system.
agree Stephen Sadie : Robin is spot on, very well explained too
2 hrs
agree Jo Bennett : Numerous examples in EUR-lex bilingual resource of "Vorsteuerabzugskürzung" translated as "reduction of input tax deduction" used as Robin describes.
17 hrs
Thanks. I know a senior VAT inspector in central London, and they certainly seem to play fast and loose with the terminology there. We translators just take a different approach to "terminological exactitude" (well, that's the theory...)
agree Derek Gill Franßen
20 hrs
Something went wrong...
4 KudoZ points awarded for this answer. Comment: "Thanks very much, Robin."
33 mins

deduction of input tax

laut Langenscheidt...


Note from asker:
Hi Martin - a deduction in input tax is Vorsteuerabzug, but my problem is Vorsteuerabzugskürzung
Something went wrong...
4 hrs

restriction of input tax

I absolutely agree with everything RobinB says above, but if you check out the UK HMRC website (search site for "input tax restriction" or use link below), you will find that the term normally used is "input tax restriction" rather than "reduction" in situations such as: VAT incurred on assets used for non-business purposes, partial exemption, etc.

--------------------------------------------------
Note added at 4 hrs (2009-02-01 19:31:19 GMT)
--------------------------------------------------

Or "restricted input tax deduction".
Example sentence:

Unlike the UK, Germany did not have a specific restriction preventing deduction of VAT in respect of cars purchased for business use.

Reference:

http://search.hmrc.gov.uk/kbroker/inldrev/inldrev/search.lsim?sr=0&nh=20&cs=iso-8859-1&sc=ir&ha=7&mt=0&qt=input+tax+restriction

Peer comment(s):
neutral RobinB : Jo, my understanding of the tax concept is that the "restriction" is at the policy level, while the "reduction" refers to the actual amount.. This means "input tax restriction" would be the English equivalent of Vorsteuerbeschränkung (please Google it).
2 hrs
Yes, Robin, have googled this and do see what you mean. As VAT officers we would have used "restriction" in either instance, but that doesn't mean we were correct to do so!
Something went wrong...
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