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German Federal Tax Court on holding a company’s right to deduct input VAT

In its decision dated 20 February 2020 (XI R 24/18) the federal tax court ruled that any taxable supplies by a holding company to its subsidiary permit the holding company to deduct input VAT in relation to shares. At the same time, the court explained the distinction of taxable services versus a mere shareholder contribution (which would not allow input VAT deduction).

Source: bakermckenzie.com

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