The Finnish Supreme Administrative Court has made a ruling on the VAT deduction of stock market listing costs. The court stated that listing costs are deductible as financing costs when a company acquires funding for its taxable business activity. The SAC’s decision is back to basics, as VAT is deductible when goods and services are used for taxable transactions. The court ruled that costs incurred for legal obligations of a listed entity, bookkeeping matters, investor communications, and financing arrangements may require the use of advisory services in connection with the listing, which do not relate to the sale of shares by existing shareholders but rather belong to the company. The ruling should assist listed companies that have been denied VAT deductions of listing costs in claiming some of the input VAT back.
Source Borenius
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