The Spanish Supreme Court recently published the landmark judgment of 18 May 2020 (the Telefonica case) where it analyzed if the amount of the turnover attributable to certain financial transactions should be included in the pro rata denominator as incidental (pursuant to Article 174.2. c) of the EU VAT Directive and the Spanish implementation). Specifically, it addressed whether (i) the sale of a subsidiary’s shares performed by a mixed-activity holding, and (ii) the income derived from certain financial derivatives that cover fluctuations over exchange and interest rates should both be included in the calculation of VAT pro rata.
Source: bakermckenzie.com
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