VATupdate Newsletter Week 01 2024

Decisions

The start of a new year is often a moment for many people to start something new. This can be work-related or personal, long-term planning or an impulsive decision. New job, or new career, you stop smoking, or you intend to renew friendships. In my case I got injured the first time I visited the gym this year, and that was just when I wanted to subscribe.

The European Court of Justice made 36 decisions in 2023. There were 42 new VAT related questions raised to the ECJ. From these new cases, two were decided within a couple of months. Where in some cases the ECJ may take several years to come to its judgment, last year it showed that it can make fast decisions as well.

The first case was a fraud-case (C-107/23), where a group of people in Romania falsified accounting documents relating to the sale of diesel fuel acquired under the excise duty suspension regime. The persons were also criminally prosecuted, and the Romanian tax authorities wanted to collect to missing VAT. The problem was that in the criminal procedure, not everything went as it should have been done, and the question thus was if the ‘failing’ of the criminal procedure also meant that the VAT collection would be impossible.

The ECJ decides that EU (VAT) Law prevails above national Law and jurisprudence. Although not very clearly stated in the case itself, it means that the Romanian tax authorities can still collect the VAT.

The second case concerned the calculation and payment of interest (C-151/23), something that the ECJ has dealt with before. That was probably the reason why the Court did not even bother to obtain the Opinion of the Advocate General and took its decision in the form of an Order. In this case, the taxpayer requested a refund of VAT, which was granted and appealed and granted and appealed several times. The Slovakian tax authorities eventually paid back the VAT, but there was doubt regarding the moment from when they should be paying interest.

The ECJ stated that the interest must be calculated when the tax authorities do not pay the VAT refund “within a reasonable period”. This period can be based on national rules, as long as this does not result in depriving the taxable person of adequate compensation for the loss caused by the late reimbursement.

Are these cases helpful for your day-to-day work? Let us know in the comments on LinkedIn.

If you have any comments, questions, or ideas that you want to share with us, please send us an email at [email protected] or leave a comment under the posts of this newsletter on LinkedIn.

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