Input tax can be recovered on costs pre-dating the effective date of VAT registration (and even incorporation), but subject to the following time-limits: six months retrospection for services, and four years for goods.

(1)  Reclaiming VAT on supplies received before starting a business

The ECJ has ruled that an ‘economic activity’ or business often starts before any sales are generated. The ECJ concluded that an ‘economic activity’ begins when pre‐trading preparatory work commences. Subject to the normal conditions, input tax incurred on pre-trading costs is recoverable. This is distinct from the relief that applies to reclaiming pre-registration input tax.

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