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A holding company has enquired whether it can deduct VAT on legal costs (accounting, auditing) that cannot be attributed to any specific activity. The DGT has ruled that the mere holding of shares without management does not constitute an economic activity and therefore does not grant a right to deduction; however, if the company carries out other taxable activities, it may deduct these expenses using a reasonable and consistent allocation method.
The tax team reviews your specific situation.
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