VAT

It was well established that in order for a taxable person to be accorded the right to deduct input VAT, and in order to determine the extent of that right, the existence of a direct and immediate link between a particular input transaction and an output transaction or transactions giving rise to the right to deduct was, in principle, necessary. However, a taxable person also had a right to deduct even where there was no direct and immediate link between a particular input transaction and an output transaction or transactions giving rise to the right to deduct, where the costs of the services in question were part of his general costs and are, as such, components of the price of the goods or services he supplied. Such costs had a direct and immediate link with the taxable person’s economic activity as a whole. In either case, whether there was a direct and immediate link would depend on