Whether a Holding company part of VAT Group can recover full VAT credit

If a holding company is part of the VAT Group and is engaged in providing loans to subsidiaries on which it earns interest (VAT exempt) and also cross charges some expenses (VATable), can it recover full VAT credit on common expenses? Since majority of the expenses would related to providing taxable activities and nothing significant would be used to provide exempt activities, can a view be taken that entire VAT credit is eligible to be recovered.

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Alina

28/12/2019 10:02:10
Replies
SAJITH NAIR28/12/2019 22:24:41

If one has mixed supplies and have common expenses then you need to apply the formula prescribed by FTA for input apportionment and claim input based on the percentage derived...in this given scenario one should ideally derive 100% recovery itself

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Deepak Agarwal30/12/2019 12:51:46

input tax apportionment will be applicable at group level. Further even if your recovery ratio is 100%, you need to maintain records of the computation to substantiate the same.

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