Calculation of the (Pre-) Pro Rata under EU VAT Law

Where taxable persons use inputs for taxed and exempt purposes, they have to attribute the costs of the inputs to both categories of transactions, commonly on the basis of a “pro rata” calculation. In this article, the authors analyse the ECJ’s decision in Securenta, in which the ECJ seems to have presented a new scenario, i.e. the method for determining the rate of deduction in respect of inputs used by taxable persons for the purposes of carrying out both economic and non-economic activities, which the authors label as “pre-pro rata”. Several comments to the authors’ conference paper are contained in Paul Lasok, "The Right To Deduct for Partially Exempt Bodies".