ECJ ruling opens path to reclaim VAT on entertainment abroad

A small window has been opened for exporters to reclaim value-added tax on overseas business entertainment following a decision in the European  Court of Justice. Particularly for the UK's pharmaceutical industry,  which is one of the country's biggest exporters, this could mean talking  about significant amounts of money.

The case is that of Danfoss and Anglo-Swedish drug major AstraZeneca,  which was heard at the European Court. In brief, UK-based AstraZeneca  had provided in-house catering facilities for business meetings with  international manufacturer, Danfoss. According to the ECJ, such lunches  have a business purpose and therefore the VAT should be deductible.