We have not had a look at holding companies under the VATnifying glass for a little while, so we thought we would cover this topic at our next seminar!

The Chelco VAT International Academy continues its series of high-level VAT educational events with a morning seminar focusing on the VAT treatment of holding activities, including the buying, issuing, holding and sale of shares.

A Cyprus-established holding company is the cornerstone of international business on the island. Yet the legislation is not particularly helpful given there are but a mere few sentences available. What has been much more helpful is the guidance provided over the years from the European Court of Justice (ECJ).

• When is a holding company a taxable person and when is it not?

• When is it obliged to apply the reverse charge mechanism, including the domestic reverse charge on construction services or purchasing of certain IT equipment?

• What are the implications with regards to deducting input VAT incurred on the acquisition of services when those services are connected to the holding, the buying, the issuing or the selling of shares?

• What guidance exists from the Department of Taxation?

These and other VAT related issues will be addressed and discussed at the seminar, with reference to key judgments of the ECJ spanning decades of case law. This will be a seminar with direct impact on the everyday practice followed by professionals dealing with the VAT matters of holding activities, and will help build up and enhance current knowledge.

The seminar will focus on:

• Discussion of when a holding entity can be considered a ‘taxable person’ for VAT purposes;

• Discussion and interpretation of the term ‘economic activity’ and ‘non-economic activity’ when it purports to the holding of shares;

• Discussion and interpretation of when an activity ‘constitutes the direct, permanent and necessary extension of its business’;

• Discussion of when a holding company should apply the ‘reverse charge’ mechanism on services received from Cypriot suppliers and international suppliers;

• Discussion of how the status of a holding company impacts its right to deduct input VAT, when holding shares, or acquiring shares, or issuing shares or selling shares;

• Discussion of implications for holding companies as members of a VAT group;

• Analysis of a plethora of ECJ decisions related to holding entities.

The seminar is open to any professional with exposure to VAT matters such as accountants, chief accountants, CFOs, financial controllers, tax lawyers, tax advisors, et al.