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Court of Justice of the European Union confirms earlier case law: full VAT deduction for active holding companies

On July 16, 2015, the Court of Justice of the European Union (“CJEU”) rendered its judgment in the joined cases Larentia + Minerva and Marenave Schiffahrts. These cases concern the VAT deduction position of holding companies and the conditions for a ‘VAT group’. The CJEU ruled that a holding company that is actively involved in the management of its participations and which performs VAT taxable services for a fee is entitled to deduct the VAT on acquisition costs. It concerns costs incurred on the capital procured to acquire participations in subsidiaries. The CJEU also concluded that entities without legal personality can be included in a VAT group.
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