ECJ Rules on Input VAT Deduction for Holding Companies’ Services to Subsidiaries

• The ECJ ruled on a case involving a Swedish holding company and input VAT deduction.
• The holding company provided services to 19 subsidiaries in areas like business management and IT.
• It invoiced approximately EUR 200,000 plus EUR 50,000 VAT using the cost-plus method.
• The holding company did not account for its total costs of EUR 2,500,000 when calculating service costs.
• It claimed a full input VAT deduction, but subsidiaries had some VAT-exempt services.
• The tax authorities wanted to increase the service amount to EUR 2,500,000 for VAT base calculation.
• The ECJ had to decide if the holding company provided one single service or multiple individual services.
• The ECJ determined the services were individual, not a single service, following the Advocate General’s opinion.
• The case highlights issues in holding company structures and VAT deduction practices.

Source: kmlz.de

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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