- The ECJ clarified that EU member states may maintain pre-existing restrictions on VAT deductions for entertainment and hospitality expenses under the standstill clause.
- Spain’s denial of VAT deductions for such expenses was upheld, as these rules reflect pre-accession practices and do not expand previous limitations.
- The standstill clause can apply even if a country did not have a full VAT system before joining the EU, as long as the economic effect of the restriction is consistent.
- The decision narrows the ability to challenge Spain’s nondeductibility of VAT on entertainment and client-related expenses, even if linked to business activities.
Source: bdo.global
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
Latest Posts in "European Union"
- Agenda of the ECJ/General Court VAT cases – 2 Judgments till July 7, 2026
- European Commission Issues Guidance on €3 Customs Duty for Low-Value E-Commerce Imports Effective 1 July 2026
- ECJ & General Court VAT Cases decided in 2026
- EGC T-383/25 (Segelbootwartung) – AG Opinion – Swiss boat repair in Germany: VAT due without customs declaration.
- EGC T-198/25 (G. Kft) – Judgment – National VAT Adjustment Restrictions Upheld for Closed Periods
