The Supreme Court determines how to calculate the pro rata of VAT between the ‘holding’ and its investees

  • Two judgments set out the doctrine imposed by the Luxembourg Court

In two sentences of 18 May 2020 (of which the judge Jesús CudeBlas has been a speaker ) and 19 May 2020 (of which the magistrate Maurandi Guillén has been a speaker), both identical in their wording, European and Spanish regulations are analyzed, as well as the jurisprudence emanating from the Court of Justice of the EU (TWENTY) in relation to the concept of “main activity” and “accessory activity” for the purposes of calculating the percentage of the VAT pro rata and to guarantee the neutrality of said tax.




The judgments partially estimate the appeals filed against the judgment of the National Court that confirmed the decision of the Administrative Economic Court in relation to the liquidation of VAT for the periods of June 2006 to december 2007.

The sale of shares in group companies made by a holding company does not deserve the accessory classification in the circumstances of the case, well, given the activities that are carried out for investee companies, it must be understood that said sale is a direct extension, permanent and necessary of the main activity of the company, ” without such a conclusion- determining the correctness of the appealed administrative decision- can be enervated exclusively taking into account the low volume of expenditure subject to VAT in the exercise of this activity of sale of shares”.

Direct involvement


The judgments argue that tenure, The purpose of acquiring and transferring these social participations is to carry out strategic planning activities, group development and evaluation, which is equivalent to setting the directive guidelines on the level and modality of presence in the market that the investee companies must have.

For this reason, it finally translates into a direct involvement in the organization and execution of the economic activities for the provision of services that the investee entities make available to consumers in the economic market of production and distribution of goods and services..

Operations with financial derivatives do not imply the performance of operations subject to VAT


The link between the acquisition and sale operations of the units and the group's business strategy, “allows us to appreciate that extension note that the doctrine of the CJEU uses as one of the valid criteria to rule out the consideration of accessory in a business activity”.

About operations with financial derivatives, the judgments indicate that they do not imply the performance of operations subject to VAT and, a, should not be included in the pro rata calculation, because the subscriber of those products (the holding company) does not provide a service when contracting the derivative, rather, it is limited to guaranteeing the coverage of certain risks that may jeopardize the successful completion of one's activities.

Source: the Economist.- 26/05/20.