5 April 2015

The Advocate General’s Opinion was issued on 26 March in the joined cases of Beteiligungsgesellschaft Larentia + Minerva mbH & Co. KG v Finanzamt Nordenham Case C-108/14 and Marenave Schiffahrts AG Case C-109/14. The question in the cases is whether a holding company is entitled to recover input VAT on costs related to share acquisitions or issues, where it intends to make management charges to the acquired company.

The Advocate General considers that the intention to make taxable supplies to the acquired businesses should be taken into account, and the passive holding of the shares (with a view to profit) should be ignored. This appears to be broadly in line with the earlier European Court ruling in Kretztechnik, Case C-465/03, and contrary to the later case of Securenta Case C-437/06.

There are also some interesting comments on VAT grouping in the latest opinion, suggesting that not only companies but also other entities and even individuals should be eligible to join. We await the court judgment with interest.