VATupdate Newsletter Week 28 2026

COFFEE

Have you ever returned a cup of coffee because it tasted terrible?

Most of us would ask for a fresh one. Some might even ask for their money back. But in 1975, a judge in Hauppauge, New York, chose a rather different approach.

After taking a sip of coffee bought from a food truck outside the courthouse, the judge became convinced that it had been watered down. Instead of complaining to the vendor, he ordered the sheriff to bring the owner before him. In handcuffs.

The bewildered food truck owner was escorted into the courthouse, questioned for almost twenty minutes, accused of cheating his customers and pressured into admitting he had diluted the coffee. He refused, because he hadn’t.

No charges were ever filed. The judge had simply used the authority of his office to settle a dispute over a bad cup of coffee.

The story didn’t end there. The vendor sued. The judge was eventually removed from office, found personally liable for abusing his powers and ordered to pay substantial damages. It may well have been the most expensive cup of coffee ever served.

The story is more than fifty years old, yet it feels surprisingly current.

One of the peculiar things about power is that it is often tempting to use it for purposes it was never intended to serve. A judge settles a personal grievance. Governments use tariffs to pursue geopolitical objectives. Sporting officials receive uncomfortable phone calls after an unfavourable decision. Different worlds, perhaps, but the same temptation: using authority to achieve something other than the purpose for which that authority exists.

Fortunately, the rule of law provides checks and balances. Powers come with limits, and those limits matter.

The same principle applies in the world of VAT.

Tax authorities have extensive powers to request information, perform audits, deny input VAT deductions, impose penalties and assess additional VAT. Those powers are essential for a properly functioning tax system. But they are not unlimited. European VAT law is built on principles such as proportionality, legal certainty and the right to effective judicial protection. Time and again, the Court of Justice of the European Union reminds both taxpayers and tax authorities that the end does not always justify the means.

That may not make for headlines as entertaining as a judge ordering the arrest of a coffee vendor, but the underlying lesson is exactly the same.

Authority is a powerful tool. It works best when it is used for the purpose for which it was intended. And not because someone happens to dislike the taste of their coffee.

At VATupdate, we prefer our coffee strong, our VAT rules clear, and our tax disputes settled without handcuffs. We hope you’ll continue to visit VATupdate.com every day for the latest developments in the fascinating world of VAT.

Anyone interested in more VAT news, developments and occasional philosophical reflections on the strange similarities between tax law and everyday life can subscribe to the weekly VATupdate newsletter at VATupdate.com

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.

To go directly to the region, click below:

TABLE OF CONTENTS: