- X SE, a parent company, incurred substantial legal costs (€294M with €61M VAT) for criminal investigations and settlements (DPAs totaling €3.6B) arising from incorrect information provided to export credit agencies.
- The District Court of The Hague ruled that X SE is entitled to a pro rata VAT deduction on these legal costs, as they were incurred for the benefit of its general economic activities and to avoid prosecution.
- The court found that the inspector failed to prove a direct link to “absolutely prohibited acts” and that the costs for legal assistance were primarily in the company’s interest, thus the Turnover Tax Deduction Exclusion Decree 1968 did not apply.
Source Taxlive
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