In this article, the authors provide a critical analysis and categorization of the CJEU case law and EU legislation as regards the VAT treatment of the purchase of goods and services by businesses, where third parties (also) benefit from these purchases. EU VAT rules seem to offer two possible outcomes: either full VAT deduction, usually followed by taxing the third party use; or, based on more recent CJEU case law, a restriction of the VAT deduction related to third party use. The authors conclude that, under current EU VAT Directive provisions and CJEU case law, VAT deduction followed by taxation is the main rule. A VAT deduction restriction will only apply in situations where the costs incurred are also used for transactions performed by the third parties, and not for their private use or consumption.