Comments on ECJ case C-527/23: Ruling on Input VAT Deduction for Intra-Group Services to Subsidiaries

Foserco SA is a company within the Weatherford group but not part of a VAT group
Foserco received administrative services from other Weatherford companies outside Romania and declared VAT liabilities under the reverse charge scheme
Tax authorities denied Foserco’s input VAT deduction due to lack of proof linking received services to its taxable outputs
ECJ ruled that input VAT deduction requires a direct link between procured services and the recipient’s output supplies
General expenses linked to a company’s overall economic activity qualify for input VAT deduction
ECJ found it irrelevant that services were provided to multiple group companies simultaneously
The necessity or appropriateness of the acquired services for the recipient is also irrelevant
The court must verify if Foserco’s share of costs corresponds to the services used for its taxed supplies
Foserco must provide proof for the input VAT deduction claims
Provision of services to multiple group recipients does not prevent input VAT deduction
Taxable persons have the autonomy to decide which services they need without proving necessity or appropriateness for VAT deduction purposes

Source: kmlz.de