Question of VAT deductibility for management services remitted back to Tax Appeal Commissioner

The Court of Appeal has an allowed an appeal by way of case stated from the High Court, and remitted to a Tax Appeal Commissioner (TAC) the question of whether a global healthcare group was wholly engaged in economic activity for VAT purposes and entitled to full VAT deductibility on management services. The Court found that the TAC and the High Court had erred in law by not properly applying the "used for" test under the Principal VAT Directive (PVD). The case has been remitted back to a TAC to allow for a reevaluation of whether the input VAT on services provided by a U.S.-based entity and other providers constitutes overhead costs that are components of the output services provided to four service recipients, and whether expenditures on specific projects were part of the group's economic activity in the exploitation of its shareholdings.