Tech companies to suffer under Euro VAT proposals

New European VAT rule proposals could hit technology companies, warns

The UK allows non-trading holding companies to enter a company’s VAT group
and recover VAT. But the European Commission want sto stop them joining a group.

Technology companies often use passive companies as investment vehicles,
which are kept seprate from trading businesses.

“Currently these holding companies are brought into VAT groups so they can
recover the VAT on costs incurred, such as fees for share issues. If the EC
proposal is enforced, it will increase the real cost of raising money at a time
when every penny counts,” said GT’s head of technology Niki Dixon.

Further reading:

Sage warns of VAT change

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