Input VAT deduction in Germany: conditions and exclusions under section 15 UStG

You can deduct input VAT if another business performed a supply or service for your business and you hold an invoice (section 15 (1) sentence 1 no. 1 UStG). The invoice must meet sections 14 and 14a UStG. Deduction is excluded, among other cases, for turnover that is itself tax-exempt and for small businesses.

If you use an item less than 10 percent for your business, it is not treated as performed for the business (section 15 (1) sentence 2 UStG). There is no deduction then either.

Last updated: 29 October 2026

The essentials in brief

Business: the supply or service must have been performed by another business for your business (section 15 (1) sentence 1 no. 1 UStG).
Invoice: you must hold an invoice issued under sections 14 and 14a UStG.
10 percent rule: if you use an item less than 10 percent for your business, it is not treated as performed for the business.
Further cases: import VAT, intra-Community acquisitions and the tax under section 13b UStG are also deductible (section 15 (1) nos. 2 to 4 UStG).
Exclusions: for example for turnover that is itself tax-exempt (section 15 (2) UStG).
Small businesses: no input VAT deduction (section 19 (1), section 15 (2) sentence 1 no. 1 UStG).

The conditions at a glance

Condition	What it means	Source
Another business	The supply or service comes from another business.	section 15 (1) sentence 1 no. 1 UStG
For your business	You use it for your business, not privately. Under 10 percent business use of an item: no deduction.	section 15 (1) sentence 2 UStG
Invoice	You hold an invoice issued under sections 14, 14a UStG.	section 15 (1) sentence 1 no. 1 UStG
Tax legally owed	The tax legally owed is deductible.	section 15 (1) sentence 1 no. 1 UStG
No exclusion	No exclusion under section 15 (1a) to (4) UStG applies.	section 15 UStG

What an invoice must contain is in mandatory invoice details in Germany. If details are missing or wrong, the invoice can be corrected (section 31 (5) UStDV).

What this means for you: check all conditions together before you claim input VAT.

Which amounts are deductible?

Under section 15 (1) UStG you can deduct these input VAT amounts:

Invoices from other businesses: the tax legally owed for supplies and services for your business (no. 1).
Imports: import VAT that arose on goods imported for your business (no. 2).
Intra-Community acquisitions: the tax on the intra-Community acquisition of goods for your business if it takes place in Germany (no. 3).
Reverse charge: the tax on services within section 13b (1) and (2) UStG performed for your business (no. 4). More: reverse charge under section 13b.

What this means for you: claim only the amounts that section 15 (1) UStG lists.

Prepayments

If you pay before the service has been performed, you can already deduct the separately shown tax. The condition: you hold the invoice and have paid (section 15 (1) sentence 1 no. 1 sentence 3 UStG).

What this means for you: you can already deduct the tax shown on a prepayment if the conditions are met.

When is input VAT deduction excluded?

The law excludes or limits deduction in these cases:

Non-deductible expenses: if the deduction ban of section 4 (5) sentence 1 nos. 1 to 4, 7 or section 12 no. 1 EStG covers an expense, the input VAT on it is not deductible either (section 15 (1a) sentence 1 UStG). There is an exception for entertainment expenses (section 15 (1a) sentence 2 UStG).
Tax-exempt turnover: input VAT on services you use for tax-exempt turnover is excluded (section 15 (2) sentence 1 no. 1 UStG). Section 15 (3) UStG sets out exceptions.
Mixed use: if you use an item only partly for turnover that excludes deduction, that part is not deductible. You may estimate it reasonably (section 15 (4) UStG).
Small businesses: anyone using the small-business rule has no input VAT deduction (section 19 (1), section 15 (2) sentence 1 no. 1 UStG). More: advance VAT return for small businesses.

What this means for you: check whether one of the exclusions applies before you deduct.

When is input VAT set off?

The input VAT amounts that fall in the tax period and are deductible under section 15 are deducted from the tax on your sales (section 16 (2) sentence 1 UStG). In the return you see this as a balance: VAT minus input VAT. How to enter input VAT in ELSTER is in VAT return: entering input VAT and expenses.

What this means for you: deduct input VAT in the period in which it falls and is deductible.

Example: a laptop for the business

You buy a laptop for your business. The invoice says 1,000 euros net plus 190 euros VAT (19 percent), issued under sections 14 and 14a UStG.

Use	Input VAT
You use the laptop for your business and hold the invoice	190 euros deductible if no exclusion applies
You use it less than 10 percent for your business	no input VAT deduction (section 15 (1) sentence 2 UStG)

The example is an illustration. With private use somewhere in between, the deduction depends on further rules this article does not cover.

What this means for you: use the example to see which amount on the invoice is the input VAT.

Small-amount invoices

You can also deduct input VAT on an invoice of not more than 250 euros if you split the invoice amount into net amount and tax (section 35 (1) UStDV). The conditions of this invoice are in small-amount invoices up to 250 euros.

What this means for you: for invoices of not more than 250 euros you can split the amount into net and tax.

Common mistakes

Not holding an invoice. Without an invoice issued under sections 14, 14a UStG there is no deduction (section 15 (1) sentence 1 no. 1 UStG).
Deducting private expenses. The service must be performed for your business.
Overlooking the 10 percent rule. Under 10 percent business use the item is not treated as received for the business.
Forgetting input VAT from reverse charge. The tax under section 13b is deductible (section 15 (1) no. 4 UStG).
Claiming input VAT as a small business. There is no deduction (section 19 (1), section 15 (2) sentence 1 no. 1 UStG).
Not having a faulty invoice corrected. The issuer can correct wrong or missing details (section 31 (5) UStDV).

What this means for you: check these points before you deduct.

How it works with VAT GPT

VAT GPT is the tax software for online sellers, freelancers and small businesses in Germany. It calculates and files in one place, in this order:

your OSS return
VAT
EÜR
trade tax
income tax

For input VAT:

Upload: You upload your expense invoices and your Amazon or eBay CSV reports. The AI reads date, amounts (gross, net, VAT), currency and country.
Check: For expense invoices from Germany with VAT shown, VAT GPT takes the tax amount into the input VAT field of the advance return, which you create monthly or quarterly. You check and confirm.
Send: With VAT GPT Pro you send via ELSTER directly to the tax office.

Get to know VAT GPT or create an account right away.

What VAT GPT does not do

VAT GPT is not tax advice, for example on whether you use an item more than 10 percent for your business.
The AI reads date, amounts, currency and country; whether an invoice contains all mandatory details under section 14 (4) UStG is for you to check.

Frequently asked questions

What do I need for input VAT deduction? A supply or service from another business for your business and an invoice issued under sections 14 and 14a UStG (section 15 (1) sentence 1 no. 1 UStG).

Can I deduct input VAT without an invoice? For tax on supplies and services from other businesses, no. You need an invoice issued under sections 14 and 14a UStG (section 15 (1) sentence 1 no. 1 sentence 2 UStG). For import VAT, intra-Community acquisitions and reverse charge, section 15 (1) sentence 1 nos. 2 to 4 UStG does not name this condition.

Does deduction apply to mixed use? With mixed use, a part may be excluded (section 15 (4) UStG). Under 10 percent business use an item is not treated as received for the business.

Can a small business deduct input VAT? No (section 19 (1), section 15 (2) sentence 1 no. 1 UStG).

Can I deduct input VAT from a small-amount invoice? Yes, if you split the amount into net and tax (section 35 (1) UStDV).

Can I deduct input VAT from the reverse charge? Yes, under the general conditions (section 15 (1) no. 4 UStG).