Page 3 of 5: Evaluating the VAT Status of the Migrating Entity
Page 3 of 5
Evaluating the VAT Status of the Migrating Entity
The first step in this assessment is to evaluate the VAT status of the entity or entities migrating to the new jurisdiction. This evaluation will help ascertain whether the migration and subsequent operations in the new location will be VAT neutral, advantageous, or result in VAT liabilities.
To assess the VAT status of the migrating entity, a thorough review of its current VAT treatment is necessary. For instance, if the entity is a pure holding company—meaning its activities are entirely passive—it will likely fall outside the scope of VAT from a European perspective. Consequently, any VAT incurred on its costs cannot be deducted, directly impacting the company’s bottom line.
Timely determination of the VAT consequences associated with the chosen migration method is essential to ensure the process is executed as efficiently and effectively as possible.