- Case Overview: Advocate General Rantos has provided guidelines regarding VAT deduction for costs incurred by a Czech hospital, Oblastní nemocnice Kolín, in purchasing necessary goods to deliver health services. The hospital provides both VAT-exempt health services and services that allow VAT deduction, leading to a dispute over the right to deduct VAT on equipment purchases.
- Czech Tax Authority’s Position: The Czech tax authorities argue that there is no right to deduct VAT for costs associated with services that provide VAT-exempt health services. The hospital contends that it should be allowed to deduct VAT on goods essential for meeting the minimum equipment requirements to obtain healthcare licenses.
- Advocate General’s Conclusion: Rantos concludes that the costs for acquiring equipment necessary for providing health services do not automatically qualify for VAT deduction, as they do not have a direct and immediate link to the hospital’s overall economic activity. However, he notes that there may still be conditions under which a right to deduct VAT could exist.
Source Taxlive
See also
- Join the Linkedin Group on ECJ/CJEU/General Court VAT Cases, click HERE
- VATupdate.com – Your FREE source of information on ECJ VAT Cases
- Podcasts & briefing documents: VAT concepts explained through ECJ/CJEU cases on Spotify
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