Holding companies not managing subsidiaries aren't VAT taxable persons.

Judgment of the Court (Sixth Chamber) · 20 juni 1991 · Judgment · Preliminary ruling

Judgment of the Court (Sixth Chamber) of 20 June 1991. - Polysar Investments Netherlands BV v Inspecteur der Invoerrechten en Accijnzen. - Reference for a preliminary ruling: Gerechtshof Arnhem - Netherlands. - Interpretation of Articles 4 and 13B (d) (5) of the Sixth Directive - Taxable person - Activities of a holding company. - Case C-60/90.

Rechtsvraag

The central legal question is whether a holding company, whose activities are solely concerned with holding shares in subsidiary companies, can be classified as a taxable person for VAT purposes under Articles 4 and 17 of the Sixth Directive.

Regel

  • Art. 4, Sixth Directive (77/388/EEC) (Defines 'taxable person' for VAT purposes)
  • Art. 17, Sixth Directive (77/388/EEC) (Concerns the right of deduction of VAT for taxable persons)

Conclusie

The court concluded that a holding company whose sole purpose is to acquire holdings, without managing them, is not a taxable person for VAT purposes under Article 4 of the Sixth Directive and thus has no right to deduct VAT under Article 17. The fact that the company is part of a worldwide group does not affect this classification.

Tijdlijn

  1. 17-05-1977 The Sixth Council Directive (77/388/EEC) on the harmonization of the laws of the Member States relating to turnover taxes is enacted.
  2. 01-01-1981 Polysar BV starts paying value added tax on various services rendered to it from January 1, 1981, until December 31, 1985.
  3. 31-12-1985 The period during which Polysar BV paid value added tax on various services ends.
  4. Unknown date after 1985 The Inspector of Customs and Excise, Arnhem, issues an assessment for the recovery of the VAT refunded to Polysar BV, considering it was not entitled to deduct the VAT under the Sixth Directive.
  5. 30-01-1990 Gerechtshof Arnhem refers questions to the Court of Justice of the European Union for a preliminary ruling under Article 177 of the EEC Treaty.
  6. 12-03-1990 The Court receives the preliminary ruling request from Gerechtshof Arnhem.
  7. 05-03-1991 The Court hears oral observations from Polysar BV, the Netherlands Government, and the Commission.
  8. 24-04-1991 The Advocate General delivers their opinion on the case.
  9. 20-06-1991 The Court delivers its judgment, ruling that a holding company like Polysar BV does not have the status of a taxable person for VAT purposes if it solely acquires holdings without managing them.