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A company has enquired whether it can deduct VAT on investment goods acquired to replace its facilities following a fire, where the cost is covered by its insurer. The DGT has ruled that if the repair or replacement system is chosen, the actual recipient is the insurer.
This ruling clarifies the VAT deduction rights in insurance indemnity scenarios, establishing that the insurer, as the recipient of replacement services, holds the right to deduct VAT rather than the insured party.
The tax team reviews your specific situation.
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