Holding companies: EU jurisprudence reminds of importance to analyze VAT expenses

The right (or not) for holding companies to deduct VAT is a heated topic at European level.

It is not unusual that VAT authorities challenge input VAT recovery of holding companies, including when these holding companies have additional activities exceeding the sole holding of shares in their subsidiaries.

Recently, a new referral (C-98/21) to the Court of Justice of the European Union (CJEU) has been asking whether a mixed holding company that supplies taxable services to its subsidiaries is allowed to deduct input VAT on purchases it received which, however, were linked to the activities of the subsidiaries. On 3 March 2022, the opinion of Advocate General (AG) on the question has been published.

Source luxtimes.lu

See also C-98/21 (Finanzamt R) – AG Opinion – No Input VAT recovery by holding for free services to subsidiaries that perform mostly VAT exempt activities

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