Wolfgang und Dr. Wilfried Rey Grundstücksgemeinschaft GbR v Finanzamt Krefeld

In Wolfgang und Dr. Wilfried Rey Grundstücksgemeinschaft GbR v Finanzamt Krefeld (Case C-332/14) (9 June 2016) the CJEU found that member states are not required to impose a direct attribution step in a partial exemption calculation and that substitute methods of attributing mixed-use supplies may be used.

Rey Grundstücksgemeinschaft a German property partnership had demolished an old building on a plot of land it owned and constructed a building for residential and commercial use. The partnership had calculated its entitlement to deduct input tax by applying an allocation key based on the ratio between the turnover generated by the taxable activity and that arising from its exempt activity (‘the turnover-based allocation key’).

The issue was whether the input tax incurred in the construction and acquisition of the building should:

·       first be attributed to each type of supplies so that at a second stage ...