Question referred
Must Article 168(a) and Article 176 of Council Directive 2006/112/EC (Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1)) of 28 November 2006 on the common system of value added tax and the principles of VAT neutrality and of proportionality be interpreted as meaning that the Portuguese legislature is entitled, under Article 21(1)(d) and 21(2)(d) of the Código do Imposto sobre o Valor Acrescentado (Value Added Tax Code), as approved by Decree No 394-B/84 of 26 December 1984, to limit the deductibility of the input VAT on expenditure on food to 50 %, even where the taxable person demonstrates that all that expenditure has been fully applied to the carrying on of its taxed economic activity?
Source: EurLex
Source EY
A Portuguese referral asking whether Article 168(a) and Article 176 of the VAT Directive and the principles of VAT neutrality and of proportionality, should be interpreted as meaning that Portugal is entitled to limit the deductibility of VAT on expenditure on food to 50%, even where the taxable person demonstrates that the expenditure is exclusively attributable to its taxable economic activity?
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