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Letting by holding company to subsidiary may give rise to deduction of VAT on acquisition costs subsidiary

Letting by holding company to subsidiary may give rise to deduction of VAT on acquisition costs subsidiary

On July 5, 2018, the CJEU decided in the Marle Partipations case that the letting of a building by a holding company to its subsidiary amounts to ‘involvement in the management’ of that subsidiary. This means that this activity must be considered for VAT to be an economic activity, giving rise to the right to deduct VAT on the expenditure incurred by the company for the purpose of acquiring shares in that subsidiary.

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