The European Court of Justice (CJEU) once ruled that holding shares is not an entrepreneurial activity for VAT purposes. Following more case law, it became clear that a legal entity merely holding shares in other companies cannot reclaim the VAT on its expenses (passive holding). In light of recent developments, we want to take a fresh look at the VAT position of a holding entity.
On March 3 2022, the Advocate General of the CJEU argued in line with the holding doctrine. The Advocate General ruled that a holding company providing services to two of its subsidiaries against a profit share is not entitled to a VAT refund on the costs associated with the provided services.
Source International Tax Review
See also
- ECJ C-98/21 (Finanzamt R) – AG Opinion – No Input VAT recovery by holding for free services to subsidiaries that perform mostly VAT exempt activities
- Right to deduct VAT by Holding companies related to their subsidiaries (Art. 167, 168, 173)
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