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Comments on ECJ C-98/21 – Holding company and dedcution of input VAT

The CJEU, in a decision of September 8, 2022, C-98/21, Finanzamt c/W GmbH, followed the conclusions of the Advocate General published on March 3, 2022 and ruled that the input VAT corresponding to purchases services provided by a holding company to third parties with a view to providing them to its subsidiaries in exchange for a share in the general profits of the latter can not be deducted for the following reasons:

  • the services on which input VAT is incurred are directly and immediately linked not to the holding company’s own operations, but to the (largely) VAT-exempt activities of the subsidiaries;
  • services are not included in the price of taxable transactions (carried out for the benefit of subsidiaries);
  • the services cannot be considered overhead costs of the holding company.

Source Hedeos

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