- Value Added Tax (VAT) Regulation 15A disallows recovery of input VAT incurred with respect to services or assets such as meals purchased by a business for the benefit of employees.
- An Israeli taxpayer offset the proportionate input VAT incurred with respect to electricity, rent, water, municipal tax and management fees, which were allocated to facilities related to employee meals.
- The Israeli VAT authorities claimed that these items fall under Regulation 15A of the VAT Regulations and therefore are not recoverable, a claim that was overruled by both the District and the Supreme Courts, based on the definition of the term “meal.”
Source EY
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