Supreme Administrative Court on Input Tax Deduction for VAT-Registered Company in Horse Racing

• High Administrative Court case on deduction of input tax for VAT-registered company competing with horses
• Principles of protection of legitimate expectations and legal certainty do not prevent the company from being denied deduction of input tax
• Decision on VAT registration based on Tax Agency’s previous view on legal situation for racing activities in trotting and gallop
• Later practice clarified legal situation for prize money, and Tax Agency clarified its conclusions
• Company could not expect Tax Agency to consider it engaged in economic activity
• Case referred back to Administrative Court for consideration of whether company should be denied deduction due to non-economic activity
• High Administrative Court case on deduction of input tax for VAT-registered company engaged in non-economic activity
• Principles of protection of legitimate expectations and legal certainty do not prevent the company from being denied deduction of input tax
• Case involved appeal from Administrative Court (KRNG case no. 599-601-22)
• Company was a parent company that purchased services used by subsidiaries or in its management role
• Company did not invoice for services or management, and therefore not considered to have engaged in economic activity
• Registration was based on conditions that were not met, as activity was carried out by subsidiary
• Registration did not give company reason to expect Tax Agency to consider it engaged in economic activity

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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