Tax Updates

ECJ: VAT credit

December 12, 2018

On 21/03/2018, the ECJ ruled on VAT reference C-533/16* re VAT credit.

The Court found that EU law precludes legislation of a Member State under which, in circumstances such as those at issue in the main proceedings in which VAT was charged to the taxable person and paid by it several years after delivery of the goods in question, the benefit of the right to claim a refund of VAT is denied on the grounds that the limitation period provided for by that legislation for the exercise of that right began to run from the date of supply and expired before the application for a refund was submitted.

 

*All rulings of the ECJ should be read in the concrete context.

ECJ: specific case

November 27, 2018

On 21/11/2018, the ECJ ruled on VAT reference C-648/16*.

The Court stated that EU VAT law does not preclude national legislation which authorises tax authorities, in the event of serious differences between declared revenue and revenue estimated on the basis of sector studies, to use extrapolation, based on such sector studies, in order to determine the amount of turnover achieved by a taxable person and, consequently, to carry out a tax adjustment requiring the payment of additional VAT, provided that that legislation and its application enable the taxable person, in compliance with the principles of fiscal neutrality, proportionality and the right of defence, to challenge the results obtained by that method, on the basis of all of the evidence to the contrary available to him, and to exercise his right of deduction in accordance with the provisions in Title X of Directive 2006/2012.

 

*All rulings of the ECJ should be read in the concrete context.

ECJ: VAT credit

November 27, 2018

On 21/11/2018, the ECJ ruled on VAT reference C-664/16* re VAT credit.

According to the Court a taxable person who is unable to provide evidence of the amount of input VAT he has paid, by producing invoices or any other document, cannot benefit from a right to deduct VAT solely on the basis of an assessment resulting from an expert report commissioned by a national court.

 

*All rulings of the ECJ should be read in the concrete context.

ECJ: VAT supply

November 12, 2018

On 08/11/2018, the ECJ ruled on VAT reference C-502/17* re VAT-able supply.

According to the Court a share disposal transaction, envisaged but not carried out for which the direct and exclusive reason does not lie in the taxable economic activity of the company concerned, or which does not constitute the direct, permanent and necessary extension of that economic activity, does not come within the scope of VAT.

 

*All rulings of the ECJ should be read in the concrete context.

ECJ: VAT import and ICS

November 12, 2018

On 25/10/2018, the ECJ ruled on reference C-528/17* re VAT exemption upon import.

According to the Court the EU rules must be interpreted to the effect that, in circumstances where the taxable importer and supplier benefitted from an exemption from import VAT on the basis of an authorisation issued after a prior examination by the competent customs authorities in the light of the evidence provided by that taxable person, the latter is not required to pay value added tax after the event where it is revealed, during a subsequent examination, that the substantive conditions for the exemption had not been met, except where it is established, in the light of objective evidence, that that taxable person knew, or should have known, that the supplies subsequent to the imports at issue were involved in fraud committed by the customer and that he did not take all reasonable steps in his power to avoid that fraud, which is a matter for the referring court to determine.

 

*All rulings of the ECJ should be read in the concrete context.

ECJ: DTT

November 12, 2018

On 24/10/2018, the ECJ ruled on reference C-602/17* re double tax treaties application.

The Court found that the EU rules do not preclude a tax scheme of a Member State under a tax convention for the avoidance of double taxation, such as that at issue in the main proceedings, which makes the exemption of the income of a resident which arises in another Member State and relates to employment in that State subject to the condition that the activity in respect of which the income is paid is actually performed in that State.

 

*All rulings of the ECJ should be read in the concrete context.

ECJ: VAT credit

October 17, 2018

On 17/10/2018, the ECJ ruled on a VAT reference C-249/17* re VAT credit.

According to the Court art. 4 and 17 of the Sixth Council Directive must be interpreted as conferring on a company, such as that at issue in the main proceedings, which intends to acquire all the shares of another company in order to pursue an economic activity consisting in the provision of management services subject to VAT to that other company, the right to deduct, in full, input VAT paid on expenditure relating to consultancy services provided in the context of a takeover bid, even if ultimately that economic activity was not carried out, provided that the exclusive reason for that expenditure is to be found in the intended economic activity.

 

*All rulings of the ECJ should be read in the concrete context.

ECJ: VAT credit

September 20, 2018

On 05/07/2018, the ECJ judged on VAT reference C-320/17* re VAT credit.

The Court ruled that the letting of a building by a holding company to its subsidiary amounts to ‘involvement in the management’ of that subsidiary, which must be considered to be an economic activity, within the meaning of Article 9(1) of that directive, giving rise to the right to deduct the VAT on the expenditure incurred by the company for the purpose of acquiring shares in that subsidiary, where that supply of services is made on a continuing basis, is carried out for consideration and is taxed, meaning that the letting is not exempt, and there is a direct link between the service rendered by the supplier and the consideration received from the beneficiary. Expenditure connected with the acquisition of shareholdings in subsidiaries incurred by a holding company which involves itself in the subsidiaries’ management by letting them a building and which, on that basis, carries out an economic activity has to be regarded as belonging to its general expenditure and the VAT paid on that expenditure must, in principle, be capable of being deducted in full.

Expenditure connected with the

ECJ: VAT credit

September 20, 2018

On 12/09/2018, the ECJ ruled on VAT reference C-69/17* re VAT credit.

According to the Court the EU rules preclude national legislation under which it is permissible for the tax authorities to refuse,on account of a failure to submit tax returns, a taxable person which has made acquisitions in the period during which its VAT identification number was revoked the right to deduct VAT on those acquisitions using value added tax returns filed — or invoices issued — after the reactivation of its identification number, on the sole ground that those acquisitions took place in the period during which its VAT identification number was de-activated and where the substantive requirements have been satisfied and the right of deduction is not being invoked fraudulently or abusively.

 

*All rulings of the ECJ should be read in the concrete context.

ECJ: VAT adjustment

September 14, 2018

On 11/04/2018, the ECJ ruled on VAT reference C-532/16* re VAT adjustment.

According to the Court:

  • article 184 of the VAT Directive must be interpreted as meaning that the obligation to adjust undue VAT deductions set down in that article also applies to cases where the initial deduction could not be made lawfully because the transaction giving rise to that deduction was exempt from VAT. By contrast, Articles 187 to 189 of Directive 2006/112 must be interpreted as meaning that the mechanism for the adjustment of undue VAT deductions provided for in those articles is not applicable in such cases, in particular in a situation such as that at issue in the main proceedings, where the initial VAT deduction was unjustified as it concerned a VAT-exempt transaction relating to the supply of land;
  • article 186 of the Directive must be interpreted as meaning