Denial of VAT deduction for expenses related to sale of subsidiary shares upheld by court

• SKAT did not approve the company’s deduction for input VAT on expenses for advisory services purchased in connection with the sale of shares in a subsidiary
• The National Tax Tribunal found, in line with SKAT, that the expenses for advisory services could be directly attributed to the company’s VAT-exempt sale of shares in the subsidiary, and therefore the company was not entitled to a deduction for input VAT on the expenses for advisory services
• The expenses for advisory services were considered to have a direct and immediate connection to the VAT-exempt sale of shares in the subsidiary, and were not considered general expenses
• The ultimate purpose of the sale of shares by the company was found to be irrelevant to the question of the company’s right to deduct the purchased advisory services
• The fact that the company used some of the proceeds from the sale of shares for its VAT-taxable economic activity could not change the outcome
• The National Tax Tribunal upheld SKAT’s decision.

Source: info.skat.dk

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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