Case Commentary: Deductibility of Input VAT in an Investment Activity

• Skatteverket has determined that private equity firms engage in mixed activities when they both engage in exempt sales of shares and provide taxable services to subsidiary companies.
• The Administrative Court has ruled in a recent case that the investment activities of a VAT group operating through a private equity fund are considered non-economic activities.
• The provision of services to a subsidiary does not automatically classify all activities as economic activities.
• The VAT group should allocate input tax on common costs between economic and non-economic activities.
• The outcome of this allocation is the same as in Skatteverket’s previous position on the deductibility of input VAT in investment activities.
• Skatteverket believes that the assessment in their previous position regarding private equity firms should no longer be applied.
• Skatteverket will provide further clarification on their stance in a new position statement.

Source: www4.skatteverket.se

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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