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A company sought clarification on whether the free distribution of spray guns for commercial promotion was subject to VAT and if the acquisition costs were deductible. The DGT ruled that if they are considered commercial samples for promotional purposes and provided in appropriate quantities, they are not subject to VAT and allow for tax deduction.
Companies can avoid VAT on the distribution of promotional items and claim input tax deductions, provided the items qualify as commercial samples.
The tax team reviews your specific situation.
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