During 2003 and 2004, the taxpayer had a building constructed which included both living accommodation and commercial premises. After completion of the building, the taxpayer let the building, that letting being partly exempt from VAT and partly subject thereto. In its VAT declaration for 2004, the taxpayer carried out a partial deduction of the input tax in relation to that building. To that end, the taxpayer calculated the amount of deductible VAT by applying a proportion determined by reference to the ratio between the turnover in relation to the commercial letting and that arising from other letting transactions. Following a tax inspection, the tax office took the view that, in accordance with German domestic law, the amount of deductible input VAT had to be determined by reference to the ratio between the area of the commercial premises and that of the premises used for living accommodation. In this case, allocation carried out in accordance with that latter method caused a downward revision of the amount of deductible VAT. The tax office therefore sent an amendment notice to the taxpayer who brought an action against that amendment notice before the Tax Court which allowed the action on the ground that domestic law was contrary to EU law since article 17(5)(c) of the Sixth Directive precluded a member state from providing, as the main criterion, a criterion for allocation other the turnover-based method.