Investment Holding Company is a mixed supplier

Regulation 40(1) of the GST Regulations 2014 allows for a non-financial institution to treat input tax attributable to exempt financial supplies as being attributable to taxable supplies.

However, such regulation is not applicable to investment holding company, because the exempt financial supplies is not incidental to the investment holding company's business activities. It is one of its core business activities.

As such, if your investment holding company derives income from management fee, dividend income as well as interest income (from advances to subsidiary or related companies), your company is a mixed supplier.

Management fee income is a standard-rated supply (tax code: SR), dividend income an out-of-scope supply (tax code: OS) while interest income an exempt supply (tax code: ES).

IRR formula for investment holding company = Management fee income / (Management fee income + Interest income).