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.
- ECJ C-98/21 (Finanzamt R) – Judgment – No Input VAT recovery by holding for free services to subsidiaries that perform mostly VAT exempt activities
- ECJ Cases on Right to deduct VAT by Holding companies related to their subsidiaries (Art. 167, 168, 173)
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