Supreme Administrative Court: Right to Deduct VAT for Holding Company

• The Supreme Administrative Court ruled that a parent company has the right to deduct input VAT on costs incurred in the acquisition of a subsidiary, even if the parent company only participates in the management of the acquired subsidiary’s subsidiary and not the acquired subsidiary itself.
• The Swedish Tax Agency’s position that input VAT deduction is not allowed if a parent company does not participate in the management of the acquired subsidiary is not in line with the court’s ruling.
• The court found that costs related to the acquisition of shares in a subsidiary can be deducted if there is a direct and immediate connection to the taxable person’s economic activities.
• The court emphasized that the objective content of transactions should be considered to determine if there is a connection between them.
• Costs related to the acquisition of shares in a subsidiary can be considered general expenses in an economic activity that solely involves participating in the management of the acquired subsidiary’s subsidiary.
• The court highlighted the importance of considering the purpose of transactions in determining the objective content.

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.

---

---