Deductibility of input tax when purchasing goods from a subcontractor for free – Case Law

• The same assessment should be made when purchasing goods as when purchasing services
• It may be necessary to consider if the purchased goods were necessary for the business
• The right to deduct input tax should be limited to the portion of the tax that was objectively necessary for the taxable person to carry out their taxable transactions or economic activities
• It does not matter if a subcontractor is allowed to use the goods for free to perform work for the taxable person
• EU Court of Justice states that denying the right to deduct input tax in this case is against EU law
• The cost of purchasing the goods must be part of the price for transactions within the taxable person’s economic activities.

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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