Entering input VAT in the German advance VAT return: recording expenses correctly

You enter the input VAT from your expenses in the advance VAT return under deductible input VAT. In the 2026 ELSTER form that is line 38 for invoices from other businesses. What you enter is the tax shown separately on the invoice, not the gross amount. The conditions are an invoice under sections 14 and 14a UStG that you hold, and a supply or service that another business performed for your business (section 15 (1) no. 1 UStG). Deductible input VAT reduces the tax you pay for the period (section 16 (2) UStG).

Last updated: 26 October 2026

The essentials in brief

Line 38: input VAT from supplies and services of other businesses when an invoice under sections 14 and 14a UStG exists; the tax in a small-amount invoice under section 33 UStDV belongs there too.
Line 39: tax on intra-Community acquisitions taxed in Germany.
Line 40: import VAT that has arisen.
Line 41: tax on services under section 13b (1) and (2) UStG that you owe as recipient.
Condition for line 38: you hold the invoice (section 15 (1) sentence 1 no. 1 sentence 2 UStG). For lines 39 to 41, section 15 (1) sentence 1 nos. 2 to 4 UStG does not name this condition.
German tax only: only tax owed under the German VAT act can be deducted.

What goes into the input VAT lines?

The ELSTER guide to the 2026 advance VAT return distinguishes four lines for deductible input VAT:

Line	What you enter
38	Tax from invoices of other businesses (sections 14, 14a UStG) and from small-amount invoices (section 33 UStDV)
39	Tax on intra-Community acquisitions under section 3d sentence 1 UStG
40	Import VAT that has arisen
41	Tax on services under section 13b (1) and (2) UStG that you owe as recipient

The legal basis for all four cases is section 15 (1) no. 1 to 4 UStG. How reverse-charge cases work is explained in Reverse charge under section 13b.

When can input VAT be deducted?

Invoice: exercising the deduction requires an invoice issued under sections 14 and 14a UStG that you hold (section 15 (1) no. 1 sentence 2 UStG). What it must contain: mandatory invoice details in Germany.
Prepayment: if the separately shown tax relates to a payment made before the supply, it is already deductible once you hold the invoice and have paid (section 15 (1) no. 1 sentence 3 UStG).
For your business: the supply must be for your business. An item you use for less than 10 percent in your business is treated as not supplied for the business (section 15 (1) sentence 2 UStG).
Exclusions: tax on supplies you use for exempt transactions is excluded (section 15 (2) sentence 1 no. 1 UStG); section 15 (3) UStG lists exceptions.
Small businesses: while you apply the small-business rule you cannot deduct input VAT under section 15 UStG (section 19 (1), section 15 (2) sentence 1 no. 1 UStG). All conditions at a glance: input VAT deduction in Germany.

Step by step: entering an expense invoice

Check the invoice: do you hold it, is the tax shown separately, and was the supply made for your business?
Read the tax amount: you need the invoice's tax amount, not the gross amount.
Choose the period: enter the input VAT in the return for the period in which the conditions are met: the invoice is held and the supply made, or for prepayments the invoice is held and payment made.
Add up: all tax amounts of the same type make the value of the respective line, so line 38 for ordinary incoming invoices.
Calculate and send: input VAT is deducted from the calculated tax (section 16 (2) UStG); the result is the amount payable or the refund.

Example

You buy office supplies for your business. The invoice shows 19 percent VAT separately.

Item	Amount
Invoice total, gross	119.00 euros
Net amount	100.00 euros
VAT (19 percent)	19.00 euros
Input VAT in line 38	19.00 euros

If you have 190.00 euros of VAT from your sales in the same period, the amount payable is 171.00 euros. The example is an illustration of the arithmetic.

Invoices from abroad

You can deduct only tax owed under the German VAT act. For the refund of foreign input VAT the ELSTER guide refers to the Federal Central Tax Office. Foreign VAT on an invoice therefore does not belong in lines 38 to 41.

Common mistakes

Entering the gross amount. You enter the tax, not the invoice total.
Deducting without an invoice. For input VAT from other businesses' invoices (line 38) the deduction is not possible without an invoice under sections 14 and 14a UStG in your hands (section 15 (1) sentence 1 no. 1 sentence 2 UStG).
Including foreign tax. Only tax owed under German law is deductible.
Using line 38 for everything. Import VAT, intra-Community acquisitions and section 13b services have their own lines.
Deducting as a small business. That is excluded while the small-business rule applies.
Items with little business use. Below 10 percent business use there is no input VAT deduction for the item (section 15 (1) UStG).

How it works with VAT GPT

VAT GPT reads your incoming invoices and carries the input VAT into the advance return:

Upload invoices: the AI reads invoice date, total, net and tax amount, currency and the supplier's country. You check and confirm the values.
Check the result: for invoices from Germany with VAT shown, the tax amount goes into the input VAT of the return. VAT GPT prepares the advance return, monthly or quarterly.
Send: with VAT GPT Pro via ELSTER directly to the tax office.

Everything is in one place: VAT return, annual VAT return, OSS return, EÜR, trade tax and income tax return. With Go you use all Pro features free of charge for 30 days. 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 an expense is business-related.
The AI reads date, amounts, currency and country; whether you may claim the deduction in a particular case is for you to check.

What does VAT GPT cost?

Free (basic features, free of charge), Go (30 days free with all Pro features), Pro €49 per month or €444 per year, each including VAT.

Frequently asked questions

Which line takes the input VAT from ordinary invoices? Line 38 in the 2026 ELSTER form.

Do I enter the gross or the tax amount? The tax amount of the invoice.

Do I need an invoice for the deduction? For input VAT on supplies from other businesses, yes: an invoice issued under sections 14 and 14a UStG must be in your hands (section 15 (1) sentence 1 no. 1 sentence 2 UStG). For import VAT, intra-Community acquisitions and section 13b services, section 15 (1) sentence 1 nos. 2 to 4 UStG does not name this condition.

Does this apply to small-amount invoices? Yes, the tax in an invoice under section 33 UStDV also goes into line 38.

Can I deduct foreign VAT? Not in the advance return; only tax owed under German law is deductible.

May a small business deduct input VAT? No, while it applies the small-business rule.