- A holding company can deduct input VAT only if its real activity qualifies as an economic/business activity and the purchased goods or services are linked to that activity.
- Pure holding companies that only own shares usually have very limited or uncertain input VAT deduction rights, especially for advisory or consulting costs.
- Holding companies that provide real, VATable services to subsidiaries may deduct input VAT if those services are properly documented, invoiced, valued, and supported by resources and evidence.
- If the holding company also carries out exempt or financial activities, the VAT deduction may require applying pro rata rules or analyzing separate sectors.
Source: irglobal.com
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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