In Beteiligungsgesellschaft Larentia + Minerva & Co v Finanzamt Nordenham (C-108/14) and Finanzamt Hamburg-Mitte v Marenave Schiffahrts (C-109/14) the advocate general (AG) considered that management holding companies should be able to deduct VAT on acquisition costs and that partnerships should be able to belong to VAT groups.
In both cases a holding company had incurred input tax in relation to the acquisition of limited partnerships to which it provided management services for a fee.
Both cases turned on the method for calculating the input tax deduction which a holding company is entitled to when purchasing shares in subsidiaries to which it is to provide taxable services.
The AG noted that the CJEU had consistently held that management holding companies carry out an economic activity. He therefore considered that expenditure connected with capital transactions incurred by a management holding company has a direct and immediate link with that holding...
