Tax Updates

On 11/04/2019, the ECJ ruled on VAT reference C-691/17*.

The Court stated that the principles of fiscal neutrality and effectiveness must be interpreted as not precluding a practice of the tax authority whereby, in the absence of any suspicion of tax evasion, that authority refuses an undertaking the right to deduct the value added tax which that undertaking, as the recipient of services, unduly paid to the supplier of those services on the basis of an invoice drawn up by that supplier in accordance with the rules on the ordinary VAT regime, whereas the relevant transaction fell under the reverse charge mechanism, and where the tax authority did not,

On 08/05/2019, the ECJ ruled on VT reference C-712/17*.

The Court stated that:

• in a situation, in which fictitious circular sales of electricity made between the same traders and for the same amounts did not cause tax losses, the principles of neutrality and proportionality, must be interpreted as not precluding national legislation which excludes the right to VAT relating to fictitious transactions while requiring the persons who enter VAT on an invoice to pay that tax, including for a fictitious transaction, provided that national law allows the tax liability arising from that obligation to be adjusted when the issuer of that invoice, who was not acting in good faith, has, in sufficient time, wholly eliminated the risk of any loss of tax revenue;
• the principles of proportionality and neutrality of VAT must be interpreted as precluding, in a situation such as that at issue in the main proceedings, a rule of national law under which the unlawful deduction of VAT is penalised by a fine equal to the amount of the deduction made.

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

On 02/05/2019, the ECJ ruled on VAT reference C-224/18*.

According to the Court it is not precluded, if an invoice relating to the performance of the service supplied is not issued or is issued late, the formal acceptance of that service from being regarded as the time when that service was supplied, where, as in the case in the main proceedings, the Member State provides that VAT is to become chargeable on expiry of a time limit running from the day when the service was supplied, provided, first, that the formality of acceptance was stipulated by the parties in the contract that binds them according to contractual terms reflecting the economic and commercial realities in the field in which the service is supplied and, second, that that formality constitutes the actual completion of the service and determines the amount of consideration due.

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

On 14/02/2019, the ECJ ruled on VAT reference C-531/17*.

According to the Court the exemption from import VAT may not be refused in respect of an importer designated or recognised as liable for payment of that tax in a situation, in which, first, the recipient of the intra-Community transfer of goods effected after that import commits tax evasion in connection with a transaction which is subsequent to that transfer and is not linked to that transfer and, secondly, there is no evidence to support the conclusion that the importer knew or ought to have known that that subsequent transaction entailed tax evasion on the part of the recipient.

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

On 13/03/2019, the ECJ ruled on VAT reference C-647/17*.

According to the Court the expression ‘services in respect of admission to events’ in that provision include a service, such as that at issue in the main proceedings, in the form of a five-day course on accountancy and management which is supplied solely to taxable persons and requires advance registration and payment.

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

On 19/12/2018, the ECJ ruled on VAT reference C-17/18*.

The Court stated that:

• ‘transfer of a totality of assets or part thereof’ must be interpreted as not covering the transaction by which an immovable property which was used for commercial purposes is let with all capital equipment and inventory items necessary for that use, even if the lessee pursues the activity of the lessor under the same name;
• a lease contract for an immovable property which was used for commercial purposes and for all capital equipment and inventory items necessary for that use constitutes a single supply in which the letting of the immovable property is the principal supply.

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

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.

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.

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.

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.