Business purpose

V3.405A Introduction

For the VAT on goods or services supplied to, or acquired or imported by, a taxable person to be regarded as input tax, those goods or services must be used for the purpose of a business carried on by that person1. It follows that goods or services supplied to a person (A) for the use or purpose of a business carried on by another person (B) is not A's input tax unless those goods/services are subsequently supplied by A to B2.

This requirement gives rise to four questions—


    (1)     What is a business purpose?


    (2)     How

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