A decision by the Supreme Administrative Court recently confirmed the right to fully deduct VAT on costs incurred on the financing and acquisition of a group subsidiary. A company with mostly taxable activities acquiring a subsidiary that has exempt activities and derives interest on a regular basis to the parent company can deduct VAT on this acquisition. These costs are considered overhead of the parent company, irrespective of the interest derived and the majority of exempt activities carried by the...
Certain businesses need to adjust their input VAT deducted throughout the year according to their partial exemption method. This amendment can also be used to reflect capital goods adjustment. Annual summary returns were previously used to reflect these adjustments but, following the repeal of the obligation to file these annual returns, adjustments should now be made in the third month (for companies filing monthly) or the first quarter of the following year.
Belgium has recently introduced the outcome of the Skandia case into its national VAT legislation. There are no significant variations from the ECJ position. According to the ECJ (Case C-7/13), where a branch of a non-EU business is part of a VAT group int eh EU and receives services from its Head Office, such services are subject to VAT in the country of the branch, hence considering the VAT group as a single taxable person.