It is admirable how much work the European Commission is currently doing in the area of VAT. The work of the European Commission, however, does not comprise the rules for VAT deduction. This is an area where Member States have still a lot of competences to set the rules. Because non-deductible VAT is a cost for businesses it will affect a business’ competitive position directly and differences in rules on VAT deduction between Member States can positively or negatively impact a business’ position. In this article I will address the areas where Member States have competences in the area of VAT deduction and will discuss whether there is a need for more harmonisation in the area of VAT deduction to ensure the proper functioning of the internal market now and in the future. This research is done in light of the 39th recital of the preamble to the VAT Directive which states that the objective of the directive is to harmonise the rules governing deductions to the extent that they affect the actual amounts collected.
Author Madeleine Merckx
Source Tandfonline
Latest Posts in "European Union"
- EU’s ViDA in Motion: How EU Member States Are Preparing for implementing Digital Reporting Requirements (DRR)
- EU Court Rules Triangulation VAT Simplification Inapplicable to Multi-Party Drop Shipments Involving Fraud
- EU Commission Seeks Feedback on Revising E-Invoicing Rules for Public Procurement
- CBAM from 2026: New TARIC Codes Mandatory for Import – No Correct Coding, No Import Approval
- Navigating VAT Exemptions: Recent ECJ Judgments and Their Implications for Intra-Community Transactions and Imports
