Comments on ECJ case C-475/23: VAT Deduction Right for Fixed Assets Provided Under Tooling Agreements Upheld by ECJ

CJEU confirmed the right to deduct VAT on the acquisition of fixed assets made available under tooling
Judgment pertains to common practice in automotive industry
Taxpayer can deduct VAT if assets are used by contracting party only for taxpayer’s taxable transactions
Case involved Austrian company providing crane to subcontractor in Romania
Tax authorities denied VAT deduction, CJEU confirmed right to deduct
Fixed assets must be used strictly for provider’s taxable business activities for VAT deduction to apply
Exclusivity of goods’ use is crucial in tooling arrangements
Compliance with formal obligations is important according to CJEU

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.