VATcodexEU VAT case law · Court of Justice and General Court

Concept of value added tax and other similar taxes EU VAT case law

8 cases of the Court of Justice and the General Court of the European Union on this point of VAT law, from 2010 to 2020.

Search within this topicThe cases ↓

Provisions these cases interpret most

The 8 cases, most recent first

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-75/18 Vodafone Magyarország

Judgment · 3 March 2020 · Hungary

Progressive turnover taxes and the prohibition on other turnover taxes

The Court held that Articles 49 and 54 TFEU do not preclude a progressive turnover tax merely because foreign-controlled undertakings bear most of it, where that follows from their achieving the highest turnover in the market. Turnover is a neutral criterion and a relevant indicator of ability to pay. Article 401 does not preclude a tax on overall turnover levied periodically, not at each stage of production and distribution, with no input deduction. The State aid question was inadmissible, the tax not being hypothecated to any exemption. Confirms that national sectoral turnover taxes sit outside Article 401 whenever they lack the staged-charging and deduction characteristics of VAT, so challenges on that basis are unlikely to succeed. Relevant to telecoms, retail, advertising and digital businesses facing progressive turnover levies in Hungary and elsewhere, and to advisers weighing such challenges.

C-185/18 Oro Efectivo

Judgment · 12 June 2019 · Spain

Non-harmonised transfer duty on purchases of gold from private individuals

The Directive does not preclude such a tax. The duty is not a turnover tax within Article 401. It does not apply generally to all transactions in goods or services and is not charged at each stage of production and distribution with deduction of tax paid at earlier stages. EU law permits concurrent systems of taxation, even where this results in double taxation of the same transaction. Fiscal neutrality does not extend beyond the harmonised VAT system, so a non-harmonised duty of this kind cannot undermine it. Confirms that businesses cannot use fiscal neutrality to attack national transfer or registration duties charged on inputs bought from private individuals. Relevant to gold, scrap, second-hand goods and jewellery dealers, and to auction and antiques traders, in Member States levying stamp or asset transfer duty on such acquisitions.

C-475/17 Viking Motors and Others

Judgment · 7 August 2018 · Estonia

Local sales tax and the prohibition on turnover taxes

Article 401 does not preclude such a tax. It lacked two of the four essential characteristics of VAT. It was not charged at each stage of production and distribution and gave no right to deduct input tax. Absence of one essential characteristic suffices. That the economic burden may reach the consumer is not decisive, since the legislation did not oblige retailers to add the tax to the price or show it on the invoice, so passing it on was optional. Confirms the strict, cumulative four characteristics test for identifying a prohibited turnover tax.

C-549/16 Palais Kaiserkron

Order · 12 October 2017 · Italy

A proportional registration duty on commercial leases may coexist with VAT

The Court holds that Article 401 does not preclude it. A duty of that kind does not have the essential characteristics of a turnover tax. It does not apply generally to all transactions concerning goods and services, it is not levied at each stage of production and distribution with deduction of the tax paid at the previous stage, and it does not bear on the added value at each stage. A straightforward application of the four criteria from Banca Popolare di Cremona and Beteiligungsgesellschaft Larentia.

C-139/12 Caixa d’Estalvis i Pensions de Barcelona

Judgment · 20 March 2014 · Spain

Indirect tax on share acquisitions in property-rich companies

The Court held that the Sixth Directive does not preclude such national legislation. The capital transfers tax lacks the essential characteristics of VAT and so is not a turnover tax caught by Article 33(1), and concurrent taxation, including resulting double taxation, is permitted. The first question needed no answer, since the referring court had not shown whether Spain had used its options under Articles 5(3) and 13C(b). The Treaty question was inadmissible as the situation was purely internal.

C-125/12 Promociones y Construcciones BJ 200

Judgment · 13 June 2013 · Spain

Reverse charge on property sold in insolvency proceedings

The Court held that every sale of immovable property by a judgment debtor comes within "compulsory sale procedure", whether made in the liquidation of the debtor's assets or in insolvency proceedings preceding liquidation, provided the sale is necessary either to settle creditors' claims or to enable the debtor to re-establish its economic or professional activities. The Spanish text ("liquidación") is narrower than most language versions and does not govern. A strict reading of the derogation must not deprive it of effect. On a purchase of real estate from an insolvent Spanish seller, and elsewhere on the same reasoning, reverse charge liability runs from the moment insolvency proceedings open and not only once liquidation begins.

C-651/11 X

Judgment · 30 May 2013 · Netherlands

Share disposal as a transfer of a going concern

The Court answers all three questions in the negative. A share transfer, whatever the size of the holding, is not equivalent to a transfer of a business unless the holding forms part of an independent unit permitting an independent economic activity which the transferee then carries on. Shares alone do not confer that. Article 5(8) speaks of a single transferor, so each sale is assessed separately. Only if the management activities were an autonomous business, separately priced, could a going-concern transfer arise, and then only for those activities. Sellers of shareholdings cannot escape VAT on the disposal by aggregating their sale with simultaneous sales by co-shareholders reaching 100%, and SKF paragraph 79 does not help where there are multiple vendors. Relevant to holding companies, private equity vendors and advisers structuring management buy-outs and exits in the Netherlands and elsewhere.

C-188/09 Profaktor Kulesza, Frankowski, Jóźwiak, Orłowski

Judgment · 29 July 2010 · Poland

Reduction of input tax deduction as a penalty for not using a cash register

The Court held that the common VAT system does not preclude a temporary restriction on the amount of deductible input tax where sales record keeping obligations are breached, provided the sanction respects proportionality, which the national court must verify. The right to deduct itself must not be rendered meaningless. A 30% withholding, preserving most of the input tax, appeared neither excessive nor inadequate. Such a measure falls under Article 22(8), not Article 27(1), and is not a turnover tax caught by Article 33. Member States may enforce cash register and accounting obligations by penalties calculated as a percentage of deductible input tax, without seeking a derogation. Relevant to retail and cash businesses across Member States operating till based reporting regimes.

Related topics

State aid · Fiscal neutrality · Exemptions · Persons liable for payment of VAT · Supply of goods or services · Origin and scope of right of deduction · Obligations of taxable persons · National derogations · Right of deduction