Mixed business

Last updated: 2021-06-21

Mixed operations means that a company has both VAT-subject and VAT-exempt operations. This means that they both sell goods or services that have 25%, 12% or 6% VAT and goods or services with 0% VAT. Read more about different VAT rates here.

Right of deduction in case of mixed activities

According to the Value Added Tax Act, it is only permitted to deduct VAT for costs that relate to the part of the business that is subject to VAT. In other words, you may not deduct VAT for the part of the business that is VAT exempt.

If the cost is shared between the part subject to VAT and the part exempt from VAT, as for example if they use the same premises, the VAT must be deducted as a percentage depending on how much of the part is used by the activity subject to VAT.