Where businesses are engaged in both taxed and exempt transactions, their input tax is only partly deductible. In the absence of detailed rules and clear guidance of the Court of Justice of the European Union, the Member States of the European Union are free to make their own rules and arrangements. In this article, the author summarizes the discussions of the conference of 14 December 2009 on VAT partial exemption in the United Kingdom, which was hosted by the Centre for Business Taxation at Oxford University and aimed at understanding why the disparities in the approaches of the Member States have arisen.
