The Court of Appeal has tried a question about the significance of the registration for the right to deduct input tax. The issue concerned a company’s right to a deduction for the purchase of services relating to planning and development work concerning a property owned by another group company. The company had not received any compensation for the services from the other Group company. The Court of Appeal considered, in the light of HFD 2021 ref. 52, that the Tax Agency can not with retroactive effect refuse a deduction for input tax for the purchases made because the Tax Agency has registered the company for VAT.
In the opinion of the Swedish Tax Agency, however, a registration cannot have such legal force that it means that someone is entitled to a deduction when the right to deduct is not linked to a taxable outgoing transaction, e.g. if the transaction as such is subject to an exemption from tax liability or does not constitute a turnover. The judgment from the Supreme Administrative Court can thus not be extended to refer to a right to deduct that is contrary to both the ML and the VAT Directive. The Swedish Tax Agency has appealed the Court of Appeal’s ruling to the Supreme Administrative Court (The Swedish Tax Agency’s legal commentary on the significance of the registration for the right to deduct input tax ).
Source: skatteverket.se
