It’s been too long since we last looked at this topic and frankly, given the importance of the VAT treatment of holding activities in Cyprus, we can’t wait to bring this topic back to the seminar room! 

The Chelco VAT International Academy continues its series of high-level VAT educational events with a morning seminar focussing 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 VAT deductions when such activities involve holding, buying, issuing or selling shares?
• What guidance exists from the Department of Taxation?

These and many 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 ‘direct or indirect involvement in the management of the companies in which the holding has been acquired’;
• Discussion and interpretation of the term ‘economic activity’ and ‘non-economic activity’;
• Discussion and interpretation of when an activity ‘constitutes the direct, permanent and necessary extension of its business’;
• Discussion of how the status of a holding company impacts its right to deduct input VAT;
• Discussion of when a holding company should apply the ‘reverse charge’ mechanism on services received from Cypriot suppliers and international suppliers;
• 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.