In C&D Foods Acquisition ApS v Skatteministeriet (Case C-502/17) (6 September 2018) Advocate General Kokott opined that legal fees incurred by a subsidiary in relation to the disposal of a subsidiary were not deductible.
C&D Foods Acquisition was the ultimate holding company of the Arovit pet food group. It provided financial management and IT support to the group trading companies and charged staff costs plus 10% and VAT.
It had incurred legal fees on a draft share sale agreement for a possible disposal of two companies of the group but no purchaser had been found and the project had been abandoned. C&D had not been allowed to deduct VAT on the legal fees by the Danish tax authorities on the grounds that the legal services had not been provided to C&D and that there was no direct and immediate link between the fees incurred and C&D’s...
