V3.416 Tax excluded from credit

V3.416 Tax excluded from credit

The legislation provides that certain tax is excluded from credit1, not regarded as input tax to be deducted or credited2 or is not input tax3. Whatever the terminology used, the overall effect is the same: the tax concerned does not form part of the credit which a person is entitled to deduct from the output tax (if any) due from him4.

The right to input tax credit is derived from arts 167–172 of Directive 2006/112/EC5; the power to exclude certain tax from credit is also derived from this Directive. Article 1766 allows national exclusions which applied

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