Comments on ECJ C-475/23: VAT deduction for provision of goods to subcontractor

The European Court of Justice had to determine whether a company is entitled to deduct input tax for an item that the company provides free of charge to a subcontractor.
Article 168(a) of Council Directive 2006/112/EC must be interpreted to allow a taxpayer to deduct input tax for the acquisition of an item that is subsequently provided to a subcontractor for activities benefiting the taxpayer, as long as the provision does not exceed what is necessary for the taxpayer to carry out taxable transactions or otherwise conduct its economic activity.
The costs of acquiring the item must be considered as part of the cost elements of the taxpayer’s taxable transactions or the goods or services provided in the course of its economic activity.