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Common flat-rate scheme for farmers EU VAT case law

7 cases of the Court of Justice and the General Court of the European Union on this point of VAT law, from 2004 to 2022.

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Under each case, what the Court decided, from its summary. The summaries are AI-generated and are not official documents: open the case for the Court’s own text.

C-697/20 Dyrektor Izby Skarbowej w L. (Loss of flat-rate farmer status)

Judgment · 24 March 2022 · Poland

Spouses farming jointly owned land as separate taxable persons

A blanket prohibition on treating such spouses as separate taxable persons is precluded where each independently carries out an economic activity, acting in his or her own name and bearing the economic risk. Joint ownership of the holding is irrelevant. But automatic loss of the other spouse's flat-rate status is permissible only after examination of the specific situation, where necessary to counter abuse or evasion that evidence cannot dispel, or where dual normal-scheme treatment raises no administrative difficulty. Member States cannot apply a one-holding-one-taxable-person rule as a general presumption of evasion.

C-262/16 Shields & Sons Partnership

Judgment · 12 October 2017 · United Kingdom

Exclusion of a farmer from the flat-rate scheme

Article 296(2) is exhaustive because exclusion is possible only for certain categories of farmers or farmers for whom the normal or simplified arrangements would cause no administrative difficulty. Article 299 operates globally on the compensation percentages and cannot support individual exclusion, and fiscal neutrality, an objective rather than an independent principle here, cannot either. A category must rest on objective, clear, precise criteria set in advance. "Substantially more" fails that test. HMRC cannot cancel a flat-rate certificate because an individual farmer has over-recovered, and over-compensation as such is not contrary to EU law.

C-340/15 Nigl and Others

Judgment · 12 October 2016 · Austria

Independence of associated partnerships and access to the flat-rate scheme for farmers

Each partnership is an independent taxable person. Acting in its own name, on its own behalf and at its own risk is decisive, and cooperation through a shared marketing company or trade mark, or the leading role of one partner, does not defeat that. The flat-rate scheme may nonetheless be refused, even absent an excluded category, if the links with that company or association make the partnerships materially capable of bearing the administrative burden of the normal or simplified arrangements. Refusal may cover earlier periods within the limitation period, but not before the facts relied on arose. Relevant to family and group structures in agriculture, wine and food production where separate partnerships share branding, bottling, central purchasing and a common sales vehicle.

C-524/10 Commission v Portugal

Judgment · 8 March 2012 · Portugal

Nil flat-rate compensation under the farmers' scheme

Portugal infringed Articles 296 to 298. The flat-rate scheme pursues both simplification and offsetting of input VAT, and the Directive provides no exemption for farming. Simplification cannot justify one. The power to reduce percentages to nil is available only where the input VAT borne by flat-rate farmers is itself insignificant, which was not so once the zero rate was repealed. Whether farmers are in overall tax credit is irrelevant. The own resources complaint was inadmissible for lack of precision. Member States operating the flat-rate scheme for farmers cannot recast it as an exemption.

C-180/10 Słaby and Others

Judgment · 15 September 2011 · Poland

Sales of building land by private landowners and the boundary of economic activity

Mere management of private property remains outside VAT. The number and scale of sales, division into plots, the period involved and the income earned are not decisive. The seller becomes a taxable person only if he takes active steps to market the land by mobilising resources similar to a trader, for example preparatory development works or proven marketing measures. Article 12(1) applies only if the Member State has actually exercised the option, which the national court must verify. Article 16 does not apply where no input VAT was deductible. Flat-rate farmer status is irrelevant. The reference point for land disposals by individuals and farmers is qualitative, not quantitative. Relevant to landowners, farmers and property developers.

C-43/04 Stadt Sundern

Judgment · 26 May 2005 · Germany

Scope of the flat-rate scheme for farmers, grant of hunting licences

The flat-rate scheme applies only to supplies of agricultural products and agricultural services as defined in Article 25(2). Every other transaction of a flat-rate farmer is subject to the general scheme. Granting hunting licences is not an agricultural service. It is not intended for agricultural purposes and does not involve hiring out equipment normally used in agricultural, forestry or fisheries undertakings. Status as a farmer is not enough. The nature of the transaction decides. The first question therefore needed no answer.

C-321/02 Harbs

Judgment · 15 July 2004 · Germany

Flat-rate farmers scheme and long-term leasing of farm assets

Such income cannot be brought within the flat-rate scheme. Annex B, read with the fifth indent of Article 25(2), covers hiring out only of equipment that the farmer normally uses in working his own land. Leasing is not mentioned, unlike in Article 13B(b). Where a farmer transfers exclusive enjoyment of land, buildings or other farm assets long term and so ceases to use them regularly himself, the turnover falls under the normal or simplified scheme, even though he continues farming elsewhere. Flat-rate farmer status is not a global label.

Related topics

Economic activity · Taxable person · Legal certainty