- The European Court of Justice clarified the scope of the minimum tax base for managing holdings.
- A Swedish case required the court to determine if all expenses of a taxpayer can be included in the calculation of the normal value.
- The holding company invoiced its subsidiaries approximately 2.3 million Swedish Krona in 2016 using the Cost-Plus Method.
- Total expenses of the holding were about 28 million Swedish Krona, with half subject to VAT and the rest VAT-exempt or non-taxable.
- The tax authority believed the holding’s charges were below normal value and increased the VAT base to 28 million Swedish Krona.
- Advocate General Juliane Kokott argued against automatically including all expenses in the tax base.
- The court ruled that the tax authority’s approach was incorrect, supporting the Advocate General’s view.
Source: blogs.pwc.de
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.
