Have you considered the VAT impact when dealing with Transactions?


In today’s tax world, considering VAT in a timely manner is key to limiting the negative impact it can have on your transaction budget. VAT on transactions can lead to either VAT savings or a VAT burden depending on various factors.

Recent developments in EUCJ case law that allows VAT deduction for active management holding companies should be considered and its impact on local regulation should be closely monitored in order to seek maximum VAT recovery (including retro-actively).

M&A stakeholders who plan to acquire/sell companies should take a closer look at the following:

  1. VAT status of the recipient: what’s the VAT status of the (holding) companies in the group?
  2. Nature of costs incurred: are costs (banking and financing, as well as lawyer, notary and advisory fees) subject to VAT, VAT exempt or out-of-scope of VAT?
  3. Roles and responsibilities of the group’s companies:
    • Is/will the holding company (be) involved in the management of all direct (daughter) subsidiaries?
    • Is the holding company able to demonstrate a link between transaction costs and its (taxable) output transactions?
    • Can input VAT deduction at group level be maximised in a post-deal stage?

For more insights on VAT-related attention points and opportunities in an acquisition context, read the entire publication here.

You can also keep up to date with other pertinent M&A topics by following our next publications on BEPS in M&A, which will each focus on a specific aspect of the transactions continuum.


Aline Borgermans, Senior Manager – aline.borgermans@be.pwc.com or +32 2 710 43 45

Christoph Zenner, Partner – christoph.zenner@be.pwc.com +32 2 710 73 48