- New VAT Policy for Holding Companies: Effective July 1, 2025, the Deputy Minister’s policy changes will clarify VAT entrepreneurship for holding companies, expanding their ability to deduct VAT on costs related to share transactions, contingent on their involvement in management or trading activities.
- Economic Activity Definitions: The updated policy recognizes that holding companies can qualify as VAT entrepreneurs if they manage subsidiaries for a fee, hold shares as a necessary extension of their activities, or engage in commercial trading of shares, expanding the criteria for VAT deduction eligibility.
- VAT Deduction and Share Transactions: While the purchase and sale of shares are typically exempt from VAT, the new policy outlines procedures for determining VAT deductibility on associated costs, emphasizing the need for careful documentation and analysis of costs related to share transactions to secure potential VAT deductions.
Sources
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