For businesses that determine their profit using the cash-basis method (Einnahmeuberschussrechnung), VAT prepayments also count as business expenses. It is important that VAT prepayments are allocated to the correct financial year. As a general rule, the cash-outflow principle applies pursuant to Section 11(2) of the Income Tax Act (EStG): the year in which payment is made is decisive. VAT prepayments qualify as regular expenditure under the 10-day rule, which means in practice that if you pay the November 2016 VAT prepayment on 10 January 2017, the payment belongs to financial year 2016 and must be recorded there as a business expense.
If you have granted a direct debit mandate, the outflow is treated as having been made on the due date - normally the 10th - regardless of any actual debit at a later point. This is subject to there being sufficient funds in the account on the due date. If the November VAT advance return (due 10.1.2017) is not actually debited until 13.1.2017, it is nonetheless to be allocated to financial year 2016.
Incorrect allocation carries the risk that the tax office will disallow the incorrectly allocated VAT prepayment as a business expense, without the payment being able to be retrospectively assigned to the correct financial year.