G. J. van Norden’s scientific contributions

In this article, the authors discuss the EU VAT law perspective on the right to deduct input VAT relating to taxed, exempt and/or non-taxable transactions. Their analysis starts from the hypothesis that, under EU VAT law, the right to deduct input VAT generally exists if taxable persons use goods and services for productive purposes. Several comments to the authors’ conference paper are contained in Peter Melz, "Activities outside the Scope of VAT and Exempt Activities" in International VAT Monitor 5 (2011).

The European Court of Justice (ECJ)’s ruling in the SKF case is a milestone in the development of the doctrine on the VAT treatment of disposals of shares by a ‘controlling active parent company’, such as AB SKF. The first question in this case was whether the disposal of shares was an economic activity and if so, whether it constituted a VAT exempt supply of services. The second question was whether input VAT incurred on costs made in connection to a share disposal can be deducted. Although the ECJ ruled that the disposal of the shares was a VAT exempt supply of services, the ECJ created routes to deduct input VAT on costs related to the disposal of the shares. Focusing on the right to deduction of input VAT, the authors investigate the implications of the ECJ’s judgment and test whether the EC VAT Directive (ECVD) and settled ECJ case law provide solid legal arguments to validate both the outcome and the implications of the SKF case.