- Service providers operating at a persistent loss and receiving public subsidies generally cannot deduct input VAT if input services are unrelated to taxable activity.
- Eligibility for input VAT deductions requires a two-step test: a direct link between remuneration and performance, and the existence of economic activity.
- The VAT Application Decree is amended to include a rebuttable presumption of non-economic activity based on cost recovery rate.
- The new rules apply to all open cases, with transitional relief allowing input VAT deductions until December 31, 2027.
Source: news.bloombergtax.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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