With its judgement of 17 October 2018 in the Ryanair case, the ECJ confirmed that holding companies do not play a special role in VAT law. The only signifi-cant factor is whether they are taxable persons within the scope of the VAT Directive. The tax authorities should now rethink. The mere denial of the right to deduct input VAT with reference to the holding structure is not permitted. However, holding companies should also assess their VAT status if they want to avoid expensive surprises.

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.

CROATIA restricts the applicability of the local reverse charge mechanism +++ FRANCE abolishes Saisonnier-returns +++ INDIA requires online market place operators to withhold tax +++ ITALY reduces the scope of electronic invoicing +++ PORTUGAL introduces real-time reporting +++ SLOVENIA requires distance sellers to file Intrastat declarations +++ SWITZERLAND only charges broadcasting fees to established companies and applies VAT to distance sales +++UK introduced a software-interface solution to file VAT returns