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Looking back @2021 #25: ECJ cases decided in 2021 on ”Taxable Persons & Related Cases”

During 2021, 8 ECJ cases were decided which relates to the topic of ”Taxable Person” and related cases as on ”Fixed Establishment” & ”Person liable for the pauyment of VAT”


C-48/20 (P) – Input VAT recovery relating to unduly invoiced VAT

  • Article 203 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax and the principles of proportionality and neutrality of VAT must be interpreted as precluding national legislation which does not allow a taxable person acting in good faith to adjust invoices improperly indicating VAT following the initiation of a tax investigation procedure, even though the recipient of those invoices would have been entitled to reimbursement of that tax if the transactions which were the subject of those invoices had been duly declared.

C-4/20 (ALTI)- Default interest also due by a person jointly liable to pay VAT

  • Article 205 of Council Directive 2006/112 / EC of 28 November 2006 on the common system of value added tax, read in the light of the principle of proportionality, must be interpreted as meaning that it does not not oppose a national regulation by virtue of which the person held jointly responsible, within the meaning of this article, must pay, in addition to the amount of value added tax (VAT) not paid by the taxpayer of this tax, the default interest owed by that taxpayer on that amount, when it is established that, while exercising his or her right to deduct, that person knew or should have known that the said taxpayer would not pay the said tax.

C-931/19 (Titanium) – No fixed establishment if the owner of the property does not have his own staff

  • A property which is let in a Member State, in the circumstance where the owner of that property does not have his or her own staff to perform services relating to the letting does not constitute a fixed establishment within the meaning of Article 43 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax and of Articles 44 and 45 of Directive 2006/112, as amended by Council Directive 2008/8/EC of 12 February 2008.

C-868/19 (M-GmbH) – Members of a partnership and the head entity can form a VAT group

  • Article 11 of Council Directive 2006/112 / EC of 28 November 2006 on the common system of value added tax, read in the light of the principles of legal certainty, proportionality and fiscal neutrality, must be interpreted in the sense that it is opposed to a national regulation which subordinates the possibility for a partnership to form, with the company of the apex body, a group of persons which can be considered as a single taxable person on added value on the condition that the partners of the partnership, alongside the umbrella body, are only people who are financially integrated into this company.

C-846/19 (EQ) – Mandates in connection with custody and guardianship cases is an Economic activity – principle of the protection of legitimate expectations?

  • Article 9(1) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that the supply of services for the benefit of adults lacking legal capacity and intended to protect them in civil matters, the performance of which is entrusted to the person supplying services by a judicial authority in pursuance of the law and remuneration for which is fixed by the same authority as a fixed amount or is based on a case-by-case assessment by taking into account in particular the financial situation of the person lacking legal capacity – and such remuneration may moreover be borne by the State in the event that that person is indigent – where that supply is for consideration, the person supplying services obtains income therefrom on a continuing basis and the overall amount of the compensation for that activity is determined on the basis of criteria intended to ensure that the operating costs incurred by the person supplying services are covered, constitutes an economic activity within the meaning of that provision.2.      Article 132(1)(g) of Directive 2006/112 must be interpreted as meaning, first, that the supply of services for the benefit of adults lacking legal capacity and intended to protect them in civil matters constitutes a ‘supply of services closely linked to welfare and social security work’, and, secondly, that it is not excluded that a lawyer supplying such services of a social nature may benefit, for the purposes of the business he or she operates and within the limits of those supplies, from recognition as a body devoted to social wellbeing, and such recognition must however necessarily be granted by a judicial authority only if the Member State concerned, by refusing that recognition, exceeded the limits of the discretion which it enjoys in that regard.3.      The principle of the protection of legitimate expectations does not preclude the tax authority from imposing value added tax (VAT) on certain transactions relating to a previous period, in a situation where that authority has, over a number of years, accepted the taxable person’s VAT returns which do not include transactions of the same kind in its taxable transactions and where the taxable person is unable to recover the VAT due from those who have remunerated those transactions, with the remuneration already paid then deemed to include this VAT already.

C-812/19 (Danske Bank) – Head Office part of VAT group & its Branch are separate taxable persons

  • Article 9 (1) and Article 11 of Council Directive 2006/112 / EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that, for the purposes of value added tax (VAT), the main establishment of a company, located in a Member State and forming part of a VAT group established on the basis of this article 11, and the branch of this company, established in another Member State, must be considered as separate taxable person when that main establishment provides the said branch with services for which it charges it.

C-655/19 (LN) – Property acquisition under enforcement procedure and subsequent sale is not an economic activity

  • Article 2 (1) (a) and Article 9 (1) of Council Directive 2006/112 / EC of 28 November 2006 on the common system of value added tax have the meaning that the which a person acquires by immovable property confiscated in the course of enforcement proceedings initiated for the purpose of repaying a previously granted loan and then proceeds with the sale of the property does not in itself constitute an economic activity, where that transaction falls within his exercise merely ownership and the proper management of private property, in which case the person in question cannot be considered a taxable person as a result of that act.

C-604/19 (Gmina Wrocław) – VAT on conversion of perpetual usufruct into a right of ownership is a supply of goods

  • Article 14(2)(a) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that the transformation of the right of perpetual usufruct into full immovable property ownership rights provided for by national legislation against payment of a fee constitutes a supply of goods within the meaning of that provision.2.      Directive 2006/112 must be interpreted as meaning that, where the transformation of the right of perpetual usufruct into full immovable property ownership rights provided for by national legislation takes place against payment of a fee to the municipality which owns the property, enabling it to obtain income therefrom on a continuing basis, that municipality, subject to the verifications to be made by the referring court, acts as a taxable person within the meaning of Article 9(1) of that directive, and not as a public authority for the purposes of Article 13(1) of that directive.

Check also the previous articles on ”Looking back @2021”

  1. Brexit
  2. E-Commerce VAT Directive launched in the EU per July 1, 2021
  3. Next to the EU, 14 countries implemented VAT on E-Commerce, another 7 will implement in 2022
  4. Saudi-Arabia is the first country in the Middle East launching E-Invoicing, UAE may follow
  5. The concept of Fixed Establishments remains a major risk, and even why?
  6. Intrastat: Major updates applicable as of Jan 1, 2022
  7. Implementation/changes E-Invoicing & Real Time Reporting during 2021
  8. ECJ cases decided in 2021 on ”Taxable Amount”
  9. Increased focus on Fighting Climate Change – Carbon tax

  10. 49 ECJ VAT Cases decided (incl. orders) in 2021
  11. Split Payments
  12. Poland and France to introduce optional taxation of Financial Services – Exemption may not longer be applied
  13. Activities of the VAT Expert Group
  14. ECJ cases decided in 2021 on ”Exemptions”
  15. Pre-Filled VAT returns
  16. SAF-T (or equivalent) regulations, some more countries will implement
  17. Environmental Tax – Will Plastic Tax stop pollution?
  18. VAT Grouping, a tool to avoid VAT leakage, optimize VAT receivables and simplify processes 
  19. EU VAT Committee met twice and a proposal to transform it into comitology committee was discussed
  20. ECJ cases decided in 2021 on ”Right to deduct VAT/Refund of VAT”
  21. Global VAT rate changes, continuous monitoring needed
  22. Global overview of future e-invoicing, e-filing, real time reporting, SAF-T – Will the Big Bang in Europe start as of 2022?
  23. What happened in the Middle East?
  24. Temporary reduction of VAT on Electricity and VAT incentives for Electric Cars

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