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principal / VAT deduction in Finland on the acquisition of subsidiaries
A decision by the Supreme Administrative Court recently confirmed the right of full VAT deduction in Finland regarding 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 group.