Tax Journal VAT Briefing for December 2018

This article was first published in the 07 December 2018 edition of Tax Journal who have agreed to Simmons & Simmons making it available on elexica.

This month’s VAT Briefing covers a decision of the CJEU that a holding company which sells shares in its subsidiary to raise funds to pay off a creditor is not entitled to input VAT recovery in relation to input VAT incurred on that sale, even where it carried on an economic activity of providing management services to the subsidiary. In another case, the CJEU held that a fee paid to cancel a contract amounted to consideration for supplies where it, in effect, enforced the minimum price payable for services during the agreed minimum contractual period. In the UK, the FTT has held that a business is not liable to account for VAT under the reverse charge provisions where it receives services from outside the EU for the purposes of its non-economic business activities. Finally, the EU Council has approved changes to the VAT Directives to allow Member States to remove the distortion between the VAT treatment of physical and electronic publications.

The VAT Briefing for December 2018 can be read here.