The taxpayer provided holiday accommodation in Bulgaria and applied VAT at the reduced rate. Bulgaria allowed the reduced rate for accommodation services, but required tourist establishments to be categorized under the Law on Tourism. After a tax audit, it was found that the taxpayer did not have a valid categorization certificate. The Court referred to the Pro Med Logistik and Pongratz case, stating that selective application of reduced rates must be concrete and specific, and comply with fiscal neutrality. The Court noted that failure to be categorized can result in penalties, but concluded that the taxpayer’s supplies had not changed despite not holding a valid categorization certificate, and therefore the rule requiring the certificate for the reduced rate did not comply with fiscal neutrality.
Source KPMG
See also
- C-733/22 (Valentina Heights) – Judgment – The eligibility for a reduced VAT rate for hotels cannot be contingent upon possessing a categorization certificate
- Roadtrip through ECJ cases: Focus on ”VAT rates” (Art. 96-99)
- Join the Linkedin Group on ECJ VAT Cases, click HERE
- VATupdate.com – Your FREE source of information on ECJ VAT Cases
Join the Linkedin Group on ECJ VAT Cases, click HERE
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