ECJ C-515/24 (Randstad España) – AG Opinion – EU VAT Law Permits Entertainment Deduction Limits If Timed with Directive Transposition

On October 23, 2025, the ECJ released the AG Judgment in the case C-515/24 (Randstad España).

Context: Request for a preliminary ruling on interpretation – Article 267 TFEU – Standstill clause – Exception to the principle of VAT neutrality – Exclusions provided for in national law prior to the date of accession – Meaning of the expression ‘provided for’ – Directive 2006/112/EC – Article 176, second paragraph – Goods and services used by the business owner for his or her taxed transactions – Article 168(a) – ‘Direct and exclusive’ application to the business or professional activity of the taxable person – Law 37/1992 on value added tax –
Article 96(One)(4) and (5).

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Summary

• The case involves Randstad España SLU, which provided factoring services and sought a VAT refund for commissions related to these services. The Spanish tax authorities denied the refund, arguing that certain fees were linked to exempt financial services, raising questions about the VAT treatment of these transactions.
• The Tribunal Supremo (Supreme Court of Spain) referred several questions to the Court of Justice of the European Union (CJEU) regarding the interpretation of the VAT Directive, particularly concerning the right to deduct input VAT. It questioned whether the fees charged in factoring transactions could be classified as taxable services under EU law.
• The CJEU determined that the commission for debt collection services and associated fees charged by Randstad constitute consideration for services subject to VAT. The Court affirmed that the service provided by the factoring company, which includes the risk of non-payment, fits within the scope of taxable transactions under Article 2(1)(c) of the VAT Directive.
• The Court justified its decision by emphasizing the need for a broad interpretation of what constitutes taxable services, noting that the services rendered were directly linked to Randstad’s economic activity. It highlighted that the VAT Directive allows for the deduction of input VAT related to taxable transactions and that exclusions must be strictly interpreted.
• Ultimately, the CJEU confirmed that the exclusion from VAT deductions for certain financial services should not apply to the factoring services in question. The ruling ensures that the right to deduct input VAT is preserved, aligning with the principles of VAT neutrality and the objectives of the VAT Directive.

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Article in the EU VAT Directive

Article 168(a) and Article 176 of the EU VAT Directive 2006/112/EC

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Facts

On May 27, 2013, Randstad España, SLU was informed that the Spanish tax authority would begin an investigation into its VAT for the years 2009, 2010, and 2011. Following this, disputed tax assessments were initiated on April 29, 2014.

On July 14, 2014, the tax authority issued decisions confirming adjustments to Randstad’s VAT claims. These adjustments were related to input VAT on expenses for public show tickets and recreational services used for client entertainment. While these expenses could be deducted for corporation tax, the tax authority determined that the input VAT on them could not be reclaimed.

Randstad challenged these assessments before the Central Tax Tribunal, which rejected the appeal on November 22, 2017. Subsequently, Randstad took the case to the National High Court, which, on January 17, 2022, partially ruled in favor of Randstad by annulling the VAT assessments and penalties for the years in question, but it upheld the tax adjustments for sporting events and recreational services. The case is now under appeal at the Supreme Court of Spain.

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Questions

1. Is a rule such as that contained in Article 96(One)(4) and (5) of Law 37/1992 of 28 December 1992 on value added tax consistent with Article 168(a) and Article 176, first paragraph, of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, where, in accordance with that rule, no proportion of the input VAT amounts resulting from the acquisition of goods and services such as [tickets for] sporting events, or those used to show appreciation for clients, salaried employees or third parties, is deductible, even if the taxpayer proves that such expenditure is directly related to his or her business or professional activity, that it had a strictly business or professional purpose and that the goods and services were used by the taxable person to carry out taxable transactions, and even though the amount of such expenditure is tax deductible for the purposes of income taxes (personal income tax and corporation tax)?
2. Is a rule such as that contained in Article 96(One)(4) and (5) of Law 37/1992 of 28 December 1992 on value added tax, which introduces a condition limiting the exercise of the right of deduction, consistent with Article 176, second paragraph, of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, where that rule entered into force the same day that the Kingdom of Spain joined the European Union, on 1 January 1986, and where no legislation in force until the date of accession provided for such a
restriction?

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AG Judgment

• In the absence of a unanimous determination by the Council, the first paragraph of Article 176 of the VAT Directive does not preclude any provision of the Spanish legislation on VAT. However, the second sentence of the first paragraph of Article 176 of that directive demonstrates that the exclusion of the right to deduct input VAT in respect of expenditure on amusements and entertainment does not contravene the intention of the legislature, even if the Council and the Commission, collectively, have not yet fulfilled their mandate under the first paragraph of Article 176 of the VAT Directive. The question of whether or not Spanish income tax legislation permits the deduction of such expenditure is not decisive for the purposes of EU law.
• The second paragraph of Article 176 of the VAT Directive must be interpreted as meaning that it precludes all Member States equally from providing for new or stricter exclusions of the right to deduct input VAT after expiry of the transposition deadline, so long as the Council and the Commission, collectively, have not yet fulfilled their mandate under the first paragraph of Article 176. Consequently, the second paragraph of Article 176 does not preclude national legislation which, for the first time, provided for an exclusion of the right to deduct input VAT in respect of expenditure on amusements and entertainment, and which entered into force at the same time as the accession and the transposition of the VAT Directive.

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Source 

• Curia

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Reference to other ECJ Cases

• Judgment of 15 April 2010, X Holding and Oracle Nederland (C-538/08 and C-33/09, EU:C:2010:192, paragraphs 37 and 39).
• Judgment of 23 April 2009, PARAT Automotive Cabrio (C-74/08, EU:C:2009:261, paragraphs 22 and 23).
• Judgment of 2 May 2019, Grupa Lotos (C-225/18, EU:C:2019:349).
• Judgment of 19 September 2000, Ampafrance and Sanofi (C-177/99 and C-181/99, EU:C:2000:470, paragraph 34).
• Judgment of 8 January 2002, Metropol and Stadler (C-409/99, EU:C:2002:2, paragraphs 42, 44 and 58).
• Judgment of 22 December 2008, Magoora (C-414/07, EU:C:2008:766, paragraph 28).
• Judgment of 30 September 2010, Oasis East (C-395/09, EU:C:2010:570).
• Judgment of 18 July 2013, AES-3C Maritza East 1 (C-124/12, EU:C:2013:488).

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