Comments on ECJ C-180/22 (Mensing II): Application of the margin scheme: VAT paid in respect of the intra-Community acquisition does not reduce the taxable amount

• The Mensing case in Germany highlighted contradictions between Union law and national law regarding VAT.
• The ECJ had to make two decisions, one on whether differential taxation applies when a reseller acquires goods intra-Community, and the other on how to determine the assessment basis for differential taxation in such cases.
• The plaintiff, an art dealer, was allowed to opt for differential taxation, but the question remained on how to determine the basis of assessment.
• The ECJ clarified that sales tax owed on intra-Community acquisitions is not part of the purchase price and does not reduce the basis of assessment.
• This means objects that a reseller acquires within the Community are treated worse than those acquired domestically or from a third country.
• Resellers who have opted for differential taxation must take this into account when calculating sales tax on sales up to April 5th, 2022.
• The Mensing decisions will remain significant for sales from April 6th, 2022, as Art. 316 (1) of the VAT Directive has been changed to restrict the regulation to only allow differential taxation if no reduced tax rate was applied to the purchase by the reseller.

Source: kmlz.de

See also

• Summary of ECJ C-180/22 (Mensing) – VAT paid on intra-EU acquisition is to be included in taxable amount under profit margin scheme
• C-180/22 (Mensing) – Judgment – VAT paid on intra-EU acquisition is to be included in taxable amount under profit margin scheme
• C-264/17 (Mensing) – Judgment – Margin scheme on works of art; right to deduct input VAT by taxable dealer

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