On 18 October 2018, the ECJ ruled in the Volkswagen Financial Services Case. It concerned the deduction of input VAT from company overheads (e.g. IT infrastructure, offices and office supplies) with exempt and taxable output supplies. The taxable person paid general costs using funds from exempt output supplies. However, this was found not to prevent the formation of a direct link with the taxable activity. The ECJ therefore, once again, confirms that the direct connection between input supplies and taxable output supplies must be viewed broadly.
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