Tax Court Rules on VAT Deduction Rights for Holding Companies with Additional Activities

• Companies holding only shares are not considered entrepreneurs for VAT purposes and have no VAT deduction rights.
• This changes if the holding company engages in other activities besides holding shares.
• On June 3, 2025, a court ruling addressed the VAT deduction rights of a holding company with additional activities.
• The case involved X BV, established in 2018, focusing on international sports clubs and athletes.
• X BV’s activities included issuing share certificates, providing loans, and offering management services.
• X BV claimed VAT deductions for costs related to these activities.
• The court ruled X BV had no VAT deduction rights for 2018 activities.
• Issuing share certificates is outside VAT scope, so no deduction rights unless other deductible activities exist.
• Loan provision is VAT-exempt, so no deduction rights for these activities.
• Management services lacked a 2018 agreement and invoices, so no deduction rights were granted.
• Holding companies with additional activities may gain partial VAT deduction rights.
• Activities should be documented and invoiced to secure VAT deduction rights.
• Even if X BV had charged for management services in 2018, full VAT deduction rights would likely not apply due to VAT-exempt loan income.

Source: vanoers.nl

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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