- Swedish VAT Act requires pro-rata for mixed VAT-able business to be determined on reasonable grounds
- Swedish Supreme Administrative Court ruled that turnover method cannot be prohibited when determining pro-rata
- Dutch pro-rata rule also follows EU legislative framework
- Article 173.1 of VAT Directive states that only VAT attributable to transactions where VAT is deductible can be deducted
- Member states can use alternative methods to determine pro-rata, such as turnover or sectorized method
- Swedish pro-rata rule based on reasonable grounds, which is unclear and case-to-case basis
- SAC ruled that Swedish pro-rata rule violates EU law
- Case involved company in finance, insurance, and car leasing industries
- STA argued for sectorized method for higher accuracy in determining pro-rata
Source: insightplus.bakermckenzie.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.
