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Comments on ECJ C-98/21: CJEU does not allow VAT recovery for contribution in kind

On September 8, 2022, the Court of Justice of the European Union (hereinafter: CJEU) rendered judgment in the W-GmbH case (C-98/21). The case focused on the VAT recovery right of a holding company that performs VAT-taxed services and also purchases services which it subsequently contributes to its two subsidiaries. The CJEU ruled that in this specific situation there is no right to recover the VAT on costs directly attributable to the contribution. The CJEU seems to have taken the VAT position of the subsidiaries, which have virtually no VAT recovery right, into account. Although the judgment was what was expected, we nevertheless have several reservations about the way in which the CJEU arrived at its ruling.

Source Meijburg

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