Latest VAT Developments: VAT Impacts of Brexit for Luxembourg Financing Companies and VAT Deduction Right on Aborted Deal Costs

2021 and Brexit bring VAT opportunities for Luxembourg companies performing financing or insurance activities with United Kingdom (“UK”) counterparts.

Furthermore, the Court of Justice of the European Union (“CJEU”) recently ruled that holding companies actively involved in the management of their subsidiaries can deduct input VAT on aborted deal costs under certain conditions.

Utmost attention should be paid to these developments which could require some actions in order to increase the VAT deduction right and to limit VAT leakages of Luxembourg holding and/or financing companies.