Case C-320/17: Judgment of the Court (Seventh Chamber) of 5 July 2018 (request for a preliminary ruling from the Conseil d’État — France) — Marle Participations SARL v Ministre de l’Économie et des Finances (Reference for a preliminary ruling — Value added tax (VAT) — Directive 2006/112/EC — Articles 2, 9 and 168 — Economic activity — Direct or indirect involvement of a holding company in the management of its subsidiaries — Letting of a building by a holding company to its subsidiary — Deduction of input tax — VAT paid by a holding company on expenditure incurred in acquiring shares in other companies)
Date: 2018-07-05
Institutions: Court of Justice
Subjects: VAT, board of management, holding company, parent company, property leasing, share, subsidiary, tax relief








C_2018301EN.01000802.xml










27.8.2018   


EN


Official Journal of the European Union


C 301/8






Judgment of the Court (Seventh Chamber) of 5 July 2018 (request for a preliminary ruling from the Conseil d’État — France) — Marle Participations SARL v Ministre de l’Économie et des Finances
(Case C-320/17) (1)

((Reference for a preliminary ruling - Value added tax (VAT) - Directive 2006/112/EC - Articles 2, 9 and 168 - Economic activity - Direct or indirect involvement of a holding company in the management of its subsidiaries - Letting of a building by a holding company to its subsidiary - Deduction of input tax - VAT paid by a holding company on expenditure incurred in acquiring shares in other companies))
(2018/C 301/10)
Language of the case: French

Referring court

Conseil d’État

Parties to the main proceedings


Appellant: Marle Participations SARL

Respondent: Ministre de l’Économie et des Finances

Operative part of the judgment







1.


Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that the letting of a building by a holding company to its subsidiary amounts to ‘involvement in the management’ of that subsidiary, which must be considered to be an economic activity, within the meaning of Article 9(1) of that directive, giving rise to the right to deduct the value added tax (VAT) on the expenditure incurred by the company for the purpose of acquiring shares in that subsidiary, where that supply of services is made on a continuing basis, is carried out for consideration and is taxed, meaning that the letting is not exempt, and there is a direct link between the service rendered by the supplier and the consideration received from the beneficiary. Expenditure connected with the acquisition of shareholdings in subsidiaries incurred by a holding company which involves itself in the subsidiaries’ management by letting them a building and which, on that basis, carries out an economic activity has to be regarded as belonging to its general expenditure and the VAT paid on that expenditure must, in principle, be capable of being deducted in full.










2.


Expenditure connected with the acquisition of shareholdings in subsidiaries incurred by a holding company which involves itself in the management of only some of those subsidiaries and which, with regard to the others, does not, by contrast, carry out an economic activity must be regarded as only partially belonging to its general expenditure, so that the VAT paid on that expenditure may be deducted only in proportion to the expenditure which is inherent in the economic activity, in accordance with the apportionment criteria defined by the Member States, which, when exercising that power, must have regard to the aims and broad logic of that directive and, on that basis, provide for a method of calculation which objectively reflects the part of the input expenditure actually to be attributed, respectively, to economic and to non-economic activity, which it is for the national courts to ascertain.






(1)  OJ C 269, 14.8.2017.