The Court held that in this case, the principle of allocation of inputs must be first applied where it is easy to carry out in practice, which would appear to be the case for costs linked to the use or maintenance of the building when the building was being used. However, if the allocation is difficult to carry out, which would appear to be the case in respect of the costs of constructing the building, the Court acknowledges that a departure from this principle can be made. Second, concerning expenses considered as not possible to allocate, and where the Member State has made use of certain options provided for in the VAT Directive, it is possible to depart from the turnover-based method that is provided for, in principle, by the VAT Directive and to apply another method (such as a floor-space based method) in order to calculate the amount of deductible input VAT, subject to the condition that, in particular, the method used guarantees a more precise determination of the proportion of deductible input VAT than the turnover-based method.
For information, the French tax code provides for a flat-rate turnover based method to be applied to all expenses and, concerning mixed-use buildings, the French tax authorities allow for a derogation from the application of a turnover-based method in certain circumstances.