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  3. Law: Taxation & Customs

Vorsteuerabzugskürzung vornehmen

English translation: reduce the input tax deduction

GLOSSARY ENTRY (DERIVED FROM QUESTION BELOW)
German term or phrase:Vorsteuerabzugskürzung vornehmen
English translation:reduce the input tax deduction
Entered by: Kim Metzger

14:34 Feb 1, 2009
German to English translations [PRO]
Bus/Financial - Law: Taxation & Customs / Swiss insolvency procedures
German term or phrase: Vorsteuerabzugskürzung vornehmen
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.
Kim Metzger
Mexico
Local time: 22:31
reduction in/reduced input tax deduction
Explanation:
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.
Selected response from:

RobinB
United States
Local time: 23:31
Grading comment
Thanks very much, Robin.
4 KudoZ points were awarded for this answer



Summary of answers provided
4 +4reduction in/reduced input tax deduction
RobinB
4restriction of input tax
Jo Bennett
3deduction of input tax
Martin Wenzel


Discussion entries: 6





  

Answers


33 mins   confidence: Answerer confidence 3/5Answerer confidence 3/5
deduction of input tax


Explanation:
laut Langenscheidt...




Martin Wenzel
Germany
Local time: 06:31
Native speaker of: Native in GermanGerman, Native in EnglishEnglish
PRO pts in category: 4
Notes to answerer
Asker: Hi Martin - a deduction in input tax is Vorsteuerabzug, but my problem is Vorsteuerabzugskürzung

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2 hrs   confidence: Answerer confidence 4/5Answerer confidence 4/5 peer agreement (net): +4
reduction in/reduced input tax deduction


Explanation:
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.

RobinB
United States
Local time: 23:31
Specializes in field
Native speaker of: Native in EnglishEnglish
PRO pts in category: 155
Grading comment
Thanks very much, Robin.
Notes to answerer
Asker: vornehmen - So "muss keine Vorsteuerabzugskürzung vorgenommen werden" could be "no reduced input tax deduction need be applied"?


Peer comments on this answer (and responses from the answerer)
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
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4 hrs   confidence: Answerer confidence 4/5Answerer confidence 4/5
restriction of input tax


Explanation:
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(s):
  • 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.lsi...
Jo Bennett
United Kingdom
Local time: 05:31
Specializes in field
Native speaker of: English
PRO pts in category: 16

Peer comments on this answer (and responses from the answerer)
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!
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