The EU VAT Treatment of Vouchers (FM nr. 157) 2019/6.3.2:6.3.2 Disallowing deduction

The EU VAT Treatment of Vouchers (FM nr. 157) 2019/6.3.2

6.3.2 Disallowing deduction

Deze functie is alleen te gebruiken als je bent ingelogd.Deze functie is alleen te gebruiken als je bent ingelogd.Deze functie is alleen te gebruiken als je bent ingelogd.

Even though the right to deduct VAT may in principle not be limited, under the current EU VAT rules, VAT on purchases is not allowed, or may not be allowed, in the following five cases:

(i)

if the costs are attributable to VAT exempt transactions without the right to deduct VAT,

(ii)

if the costs are attributable to non-economic activities

(iii)

if the costs are attributable to consumptive use of an immovable business asset,

(iv)

if the costs exceed the amount which was objectively necessary to allow a business to carry out its taxed transactions, and

(v)

if costs are incurred for which VAT recovery is not allowed under a so-called ‘stand still’ provision.

I will elaborate on the effects of VAT exemption (i) in the section about transactions that are deemed to be made for consideration below. The other four situations I will briefly discuss now.

6.3.2.1 No recovery of VAT on costs for non-economic activities6.3.2.2 No recovery of VAT on immovable property used for private consumption6.3.2.3 No recovery of VAT on costs that exceed what is objectively necessary to allow a business to carry out its taxed transactions6.3.2.4 No recovery of VAT on costs under the ‘stand still’ provision

Deze functie is alleen te gebruiken als je bent ingelogd.