.png)
.png)
A French holding company with three subsidiaries reclaimed input tax. The French authority rejected the claim, arguing that the company was not carrying on any economic activity. The company appealed, and the case was referred to the European Court of Justice.
A French holding company with three subsidiaries reclaimed input tax. The French authority rejected the claim, arguing that the company was not carrying on any economic activity. The company appealed, and the case was referred to the European Court of Justice.
The Court ruled that the management of subsidiary companies could qualify as an economic activity within Article 4(2) of the Sixth Directive if it was accompanied by activities such as the performance of administrative, financial, commercial or technical services. Furthermore, costs relating to the acquisition of shares in a subsidiary company could be treated as general overhead costs, with input tax deduction apportioned where appropriate according to Article 17(5). It was also held that the receipt of dividends was outside the scope of VAT.
(Cibo Participations SA v Directeur Régional des Impôts du Nord-Pas-de-Calais (Case C-16/00), European Court of Justice, 27 September 2001.)
