The case concerns an appeal against a binding prior statement (BFU) of 12 May 2021.
The issues in the case relate to the VAT law treatment of the planned cooperation agreement between A AS (submitter) and [place] municipality. The co-operation agreement will apply to the preparation of joint ditches for laying the parties’ cables, as well as the procurement and installation of the cables.
The case raises the question of whether the planned transaction will wholly or partly involve turnover from A AS to [place] municipality, as well as the scope of A AS’s right to deduct VAT on purchased services.
In a binding prior statement, the Tax Office has concluded that the submitter in the planned collaboration agreement will only be considered to sell project management services to the municipality, and not delivery of physical construction work, cf. the Value Added Tax Act § 1-3 first paragraph letter a. when selling the project manager services to the municipality, cf. the Value Added Tax Act § 3-1.
Furthermore, the tax office has concluded that the submitter will not have the right to deduct input VAT on the physical construction work which only applies to [place] municipality, and which they shall become owners of, cf. the Value Added Tax Act § 8-1. The tax office has concluded that the submitter will have a proportionate right to deduct input VAT on the physical construction work that is linked to both A AS and [place] municipality, cf. the Value Added Tax Act § 8-1.
The Secretariat of the Tax Appeals Board recommends that the appeal not be upheld.
Legal references: The Value Added Tax Act § 1-3 first paragraph letter a, § 3-1 and § 8-1
Source: skatteetaten.no
