- The case involves a question about deduction for input tax on costs for a VAT group engaged in an investment activity through a private equity fund.
- The VAT group’s main activity is to make direct or indirect equity investments and manage the equity holdings to increase the value of its portfolio companies and generate income for its investors.
- The group also provides certain services to an investment company (a subsidiary of the group) for a fee, but these services constitute a small part of the overall activity and do not qualify as economic activity for VAT purposes.
- The investment activity is considered non-economic and falls outside the scope of VAT.
- However, since the group also engages in economic activity by providing services to the investment company, a division of input tax should be made.
- The court finds that the majority of the costs are attributable to the investment activity, and the allocation method used by the tax authority is reasonable.
- The company has appealed the decision to the Supreme Administrative Court.
- The tax authority will review its position on the deductibility of VAT for holding companies in light of the court’s ruling.
- The VAT group is engaged in investment activities through a private equity fund, with two companies in the group forming the fund and acquiring shares in three unlisted companies.
- The group provides management and advisory services to an investment company owned by the fund, but the income from these services is minimal compared to the group’s costs.
Source: www4.skatteverket.se
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.
