Bauexperte
2011-11-15 10:21:46
- #1
Photovoltaic system and input tax deduction: System on privately used building (BFH) - I
If acquisition or start of production was before 1.1.2011, the input taxes from the production costs of a privately used building on which a photovoltaic system is installed (here: carport) can be fully claimed, provided that the minimum entrepreneurial use of 10% calculated according to the sales key is reached. For new systems, the input tax deduction is only available proportionally.
Background
The BFH takes a position in this fundamental decision regarding the scope of the input tax deduction when installing a photovoltaic system (photovoltaic system) on an otherwise privately used building.
A constructed a carport in 2008, which he used to park his privately used car. He installed a photovoltaic system on the roof area. He sells the generated electricity to an energy supplier. For 2008, A claimed the input tax amounts from the entire acquisition/production costs of the photovoltaic system and the carport. The tax office and the fiscal court did not recognize the input tax amounts insofar as they related to the construction of the carport, as it was used for non-entrepreneurial purposes by parking the private car.
Decision
The BFH first confirms that the operation of a photovoltaic system constitutes an entrepreneurial activity and that the carport, for whose construction the disputed input tax amounts were incurred, serves the photovoltaic system. Because of the use of the carport for parking the private car, there is partial entrepreneurial and partial private use. When delivering such a mixed-use item, the entrepreneur can assign it entirely to his business, with the consequence that he is entitled to a full input tax deduction. The private use of the item is then to be taxed as a non-cash transfer. This corresponds to the so-called "Seeling jurisprudence" of the ECJ and accordingly of the BFH cited by the plaintiff Seeling.
However, a prerequisite for the input tax deduction is that the mixed-use item is used at least 10% entrepreneurially (minimum entrepreneurial use). A building is generally divided according to the ratio of usable areas. However, for the use of the roof area and the areas inside the building, the division according to usable areas is not suitable. Instead, a sales key is appropriately applied. The reference is to the fictitious sales that would result if the roof areas were rented out for operating a photovoltaic system and the carport otherwise as parking space.
The BFH referred the case back to the fiscal court to determine whether the 10% limit of the entrepreneurial use share was reached.
Note
The decision relates to the legal situation up to 2010. As of 1.1.2011, the legislator abolished the previous "Seeling model". According to the new regulation, the input tax deduction is only allowed proportionally. It is excluded as far as a mixed-used property is used non-entrepreneurially (insertion of new paragraph 1b in § 15 UStG). However, the previous principles (full input tax deduction with simultaneous taxation of private use) continue indefinitely under the transitional provision if the mixed-used property was acquired before 1.1.2011 or if production began before this date.
Judgment of 19.7.2011, XI R 21/10, published on 9.11.2011
Best regards
Construction expert
Photovoltaic system and input tax deduction II: System on vacant building (BFH)
The input tax deduction from the production costs of a building on which a photovoltaic system is installed, but which is otherwise not used (here: shed), is only available proportionally to the extent of entrepreneurial use.
Background
This is a parallel decision to the fundamental judgment XI R 21/10, which was also issued on 19.7.2011. That proceeding concerned a photovoltaic system (photovoltaic system) on an otherwise privately used building (carport used for the private car). In contrast, in the present case the building on which the system was installed stood vacant, i.e., was otherwise not used.
B constructed a shed on his property in 2006 and installed a photovoltaic system on it. However, the tax office granted the input tax deduction only for the expenses directly attributable to the system, but not for the costs of constructing the shed. The fiscal court dismissed the lawsuit, as the shed was not used entrepreneurially to the necessary extent of 10%. It understands the 10% threshold such that only the living/usable area of a building is included in the calculation, not the use of the roof.
Decision
The BFH first establishes that B acted as an entrepreneur since the operation of a photovoltaic system meets the requirements of an entrepreneurial activity. However, since he did not use the shed entirely entrepreneurially, he is entitled not to the full but only the proportional input tax deduction from the invoices for the construction of the shed. The roof was partly used entrepreneurially and parts of the system (control cabinet, etc.) were inside the shed. However, insofar as the shed stood vacant, there was no entrepreneurial use. Unlike in case VI R 21/10 (carport case), the shed was not partially privately used but just stood vacant. Only in the case of partial private use is an assignment of the entire mixed-used object to the business possible. In the case of partial non-commercial use (vacancy), assignment of the entire building to the business is not permitted.
Lacking a right of assignment, B can therefore only claim the input tax deduction proportionally from the services for the construction of the shed. However, this requires that the entrepreneurial use of the shed amounts to at least 10%. This minimum entrepreneurial use is a legal prerequisite for the input tax deduction.
The matter was referred back to the fiscal court. The fiscal court has to determine whether the entrepreneurial use share reaches the 10% limit. For buildings, a division according to usable areas is generally made. Since the usable areas within a building and on the roof are not comparable, the BFH considers it appropriate to apply a sales key and to base this on the fictitious rental revenues for the roof area on the one hand and the usable area on the other hand.
Note
After the abolition of the so-called "Seeling model" by the 2010 Annual Tax Act (insertion of paragraph 1b in § 15 UStG), in new cases with partial private use only the proportional input tax deduction is also allowed.
Judgment of 19.7.2011, XI R 29/09, published on 9.11.2011
Best regards
Construction expert
If acquisition or start of production was before 1.1.2011, the input taxes from the production costs of a privately used building on which a photovoltaic system is installed (here: carport) can be fully claimed, provided that the minimum entrepreneurial use of 10% calculated according to the sales key is reached. For new systems, the input tax deduction is only available proportionally.
Background
The BFH takes a position in this fundamental decision regarding the scope of the input tax deduction when installing a photovoltaic system (photovoltaic system) on an otherwise privately used building.
A constructed a carport in 2008, which he used to park his privately used car. He installed a photovoltaic system on the roof area. He sells the generated electricity to an energy supplier. For 2008, A claimed the input tax amounts from the entire acquisition/production costs of the photovoltaic system and the carport. The tax office and the fiscal court did not recognize the input tax amounts insofar as they related to the construction of the carport, as it was used for non-entrepreneurial purposes by parking the private car.
Decision
The BFH first confirms that the operation of a photovoltaic system constitutes an entrepreneurial activity and that the carport, for whose construction the disputed input tax amounts were incurred, serves the photovoltaic system. Because of the use of the carport for parking the private car, there is partial entrepreneurial and partial private use. When delivering such a mixed-use item, the entrepreneur can assign it entirely to his business, with the consequence that he is entitled to a full input tax deduction. The private use of the item is then to be taxed as a non-cash transfer. This corresponds to the so-called "Seeling jurisprudence" of the ECJ and accordingly of the BFH cited by the plaintiff Seeling.
However, a prerequisite for the input tax deduction is that the mixed-use item is used at least 10% entrepreneurially (minimum entrepreneurial use). A building is generally divided according to the ratio of usable areas. However, for the use of the roof area and the areas inside the building, the division according to usable areas is not suitable. Instead, a sales key is appropriately applied. The reference is to the fictitious sales that would result if the roof areas were rented out for operating a photovoltaic system and the carport otherwise as parking space.
The BFH referred the case back to the fiscal court to determine whether the 10% limit of the entrepreneurial use share was reached.
Note
The decision relates to the legal situation up to 2010. As of 1.1.2011, the legislator abolished the previous "Seeling model". According to the new regulation, the input tax deduction is only allowed proportionally. It is excluded as far as a mixed-used property is used non-entrepreneurially (insertion of new paragraph 1b in § 15 UStG). However, the previous principles (full input tax deduction with simultaneous taxation of private use) continue indefinitely under the transitional provision if the mixed-used property was acquired before 1.1.2011 or if production began before this date.
Judgment of 19.7.2011, XI R 21/10, published on 9.11.2011
Best regards
Construction expert
Photovoltaic system and input tax deduction II: System on vacant building (BFH)
The input tax deduction from the production costs of a building on which a photovoltaic system is installed, but which is otherwise not used (here: shed), is only available proportionally to the extent of entrepreneurial use.
Background
This is a parallel decision to the fundamental judgment XI R 21/10, which was also issued on 19.7.2011. That proceeding concerned a photovoltaic system (photovoltaic system) on an otherwise privately used building (carport used for the private car). In contrast, in the present case the building on which the system was installed stood vacant, i.e., was otherwise not used.
B constructed a shed on his property in 2006 and installed a photovoltaic system on it. However, the tax office granted the input tax deduction only for the expenses directly attributable to the system, but not for the costs of constructing the shed. The fiscal court dismissed the lawsuit, as the shed was not used entrepreneurially to the necessary extent of 10%. It understands the 10% threshold such that only the living/usable area of a building is included in the calculation, not the use of the roof.
Decision
The BFH first establishes that B acted as an entrepreneur since the operation of a photovoltaic system meets the requirements of an entrepreneurial activity. However, since he did not use the shed entirely entrepreneurially, he is entitled not to the full but only the proportional input tax deduction from the invoices for the construction of the shed. The roof was partly used entrepreneurially and parts of the system (control cabinet, etc.) were inside the shed. However, insofar as the shed stood vacant, there was no entrepreneurial use. Unlike in case VI R 21/10 (carport case), the shed was not partially privately used but just stood vacant. Only in the case of partial private use is an assignment of the entire mixed-used object to the business possible. In the case of partial non-commercial use (vacancy), assignment of the entire building to the business is not permitted.
Lacking a right of assignment, B can therefore only claim the input tax deduction proportionally from the services for the construction of the shed. However, this requires that the entrepreneurial use of the shed amounts to at least 10%. This minimum entrepreneurial use is a legal prerequisite for the input tax deduction.
The matter was referred back to the fiscal court. The fiscal court has to determine whether the entrepreneurial use share reaches the 10% limit. For buildings, a division according to usable areas is generally made. Since the usable areas within a building and on the roof are not comparable, the BFH considers it appropriate to apply a sales key and to base this on the fictitious rental revenues for the roof area on the one hand and the usable area on the other hand.
Note
After the abolition of the so-called "Seeling model" by the 2010 Annual Tax Act (insertion of paragraph 1b in § 15 UStG), in new cases with partial private use only the proportional input tax deduction is also allowed.
Judgment of 19.7.2011, XI R 29/09, published on 9.11.2011
Best regards
Construction expert