Entitlement to input tax deduction for import VAT

A service provider who carries out the import and customs clearance of an item on behalf of another company is liable for import VAT, but is not entitled to deduct the import VAT.

The input tax deduction of import VAT requires that the imported goods were imported for the purposes of the company's sales subject to VAT. According to the Federal Fiscal Court, this presupposes that the company itself uses the goods for these transactions. If, on the other hand, the importing business merely provides a customs clearance or transportation service in relation to the imported goods, it is therefore not entitled to deduct input VAT on the import VAT paid. Instead, the service provider must claim the refund from its customer on whose behalf it carried out the customs clearance and who is entitled to the input VAT deduction.