Hi,

I have a client that incurred legal fees to obtain legal advice on a franchise agreement that they have previously entered into and to discuss a possible exit from the agreement.

For purposes of income tax, I have indicated that these legal fees are not deductible for income tax (is this correct?).

Now, by indicating that it is not a income tax deductible expense, does that automatically disqualify this expense for VAT input deduction as well?

Any thoughts on this?