Deduction of VAT incurred by “mixed holdings”

We have become aware of another resolution regarding the confusing issue of the deductibility of VAT paid by holding companies that are considered VAT taxpayers due to providing services to their subsidiaries (known as “mixed holdings”).In this case, the TEAC (Central Administrative Economic Court), in its resolution of February 21, 2023, reaffirms the criteria of another resolution from October 21, 2020, stating that the VAT incurred by a “mixed holding” for services received related to the acquisition of shares in subsidiary entities is not deductible. To be deductible, it would be necessary for the cost to be included in the price of the services provided by the holding company, a circumstance that has not been proven.In this matter, we are experiencing increasing legal uncertainty, resulting not only from the wide range of specific cases but also from the disparity of criteria applied by both the Tax Authority and the Courts, as well as the absence of specific regulations in domestic VAT legislation. We will continue to provide updates on this issue…

Source: audiconsultores-etlglobal.com

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