Right to deduction in case of cancelled acquisition of shares
By the planned acquisition of shares in the target company, potential acquirer’s intention was to provide the target company with management services and, on that basis, to carry out an economic activity. Such an activity gives rise to VAT deduction on expenditure relating to consultancy services and other services in connection with the planned acquisition although said acquisition wouldn’t occur.
The right to deduct is retained even if the intended economic activity of an active holding is not carried out and, therefore, does not give rise to taxed transactions or said holding is unable to use the goods or services which gives rise to a deduction in the context of taxable transactions by reason of circumstances beyond his control.
One may benefit from the right to fully and immediately deduct VAT paid on the services related to the preparatory acts, even if, ultimately, that economic activity, which is to give rise to taxable transactions, is not carried out (17/10/2018, C-249/17).