On the one hand, the CJEU decided that this company is allowed to deduct the VAT
incurred on market studies related to the aborted transaction. However, on the other
hand, the CJEU refused the deduction of the VAT incurred on banking costs linked to
the issuing of bonds to finance the aborted transaction. This is because the funds
collected, due to the abortion of the initial deal, had been since used for another
activity that is not entitled to input VAT deduction. Therefore, the CJEU refused the
company’s argument that its original intention was to use these funds for activities
that open the right to deduct VAT, focusing solely on the funds’ effective use instead.