Principles of legality and proportionality of criminal offences and penalties EU VAT case law

5 cases of the Court of Justice and the General Court of the European Union on this point of VAT law, from 2014 to 2026.

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Provisions these cases interpret most

Article 273 of Directive 2006/112/EC Obligations of taxable persons and certain non-taxable persons · 3 of these cases
Article 2 of Directive 2006/112/EC Subject matter and scope · 1 of these cases
Article 12 of Directive 2006/112/EC Taxable persons · 1 of these cases
Article 49 of Directive 2006/112/EC Particular provisions · 1 of these cases
Article 50 of Directive 2006/112/EC Particular provisions · 1 of these cases
Article 52 of Directive 2006/112/EC Particular provisions · 1 of these cases
Article 17 of Sixth Directive 77/388/EEC Deductions · 1 of these cases
Article 28b of Sixth Directive 77/388/EEC Transitional arrangements for the taxation of trade between member states · 1 of these cases

The 5 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-544/24 Nekilnojamojo turto valdymas

Judgment · 30 April 2026

Proportionality of default interest on VAT arrears

The first question is inadmissible because Article 50 does not apply while the criminal proceedings are pending with no final conviction or acquittal. On the second, default interest on VAT arrears is preventive and compensatory, not punitive, so Article 49(3) does not apply, subject to verification by the referring court. Proportionality does not preclude a statutorily fixed rate with no power to reduce, disapply part, or remit outside exhaustively defined cases, including interest accruing during audit and litigation. Confirms that fixed statutory VAT default interest, without modulation for culpability or gravity, survives proportionality review, and that the absence of discretion is itself a safeguard of equal treatment and legal certainty.

C-733/23 Beach and bar management

Judgment · 3 July 2025 · Bulgaria

Cumulation of fines and sealing of premises for till receipt failures

Both national rules are precluded. Sealing plus an access ban is criminal in nature for Article 50 purposes because of its intrinsic severity, and it does not lose that character merely because it also serves a preventive aim, nor because it responds to 85 breaches taken together rather than one. Separately, a fine with a high statutory minimum, here nearly 200 times the VAT evaded per breach, breaches proportionality where the court cannot reduce or substitute it. Confirms and extends MV-98 to bulk offences.

C-107/23 PPU Lin

Judgment · 24 July 2023

Limitation periods for VAT fraud, and the limits of a national standard of protection

The Court held that those provisions do not require the national courts to disapply case law of that kind where it flows from the principle that offences and penalties must be defined by law, as protected under national law in its requirements of foreseeability and precision, even though a considerable number of cases of serious fraud affecting the Union's financial interests will be discontinued as time-barred. Those provisions do, however, require the courts to disapply a national standard of protection relating to the retroactive application of the more lenient criminal law which permits the interruption of limitation to be called into question in such cases, including on appeals against final judgments. The principle of primacy precludes national legislation or practice binding ordinary courts to the decisions of the constitutional and supreme courts, at the risk of disciplinary liability, where they consider that case law contrary to directly effective EU law. The case sits at the junction between the duty to counter fraud affecting VAT-based own resources and the national constitutional guarantees surrounding criminal liability.

C-570/20 BV

Judgment · 5 May 2022 · France

Combining tax penalties and criminal sanctions for VAT fraud, ne bis in idem

Article 50 read with Article 52(1) does not preclude the limitation to the most serious cases resting solely on settled restrictive case-law, provided it was reasonably foreseeable when the offence was committed that duplication could follow. Professionals may be expected to take legal advice. But it does preclude legislation that fails to ensure, by clear and precise rules (including as interpreted by the courts), that the total severity of penalties does not exceed the seriousness of the offence where a financial penalty is combined with a custodial sentence. Confirms that Member States may build the "most serious cases" filter for parallel VAT surcharges and prosecutions through case-law rather than statute, so long as the outcome was foreseeable, with a lower foreseeability threshold for taxable persons acting professionally.

C-131/13 Schoenimport Italmoda Mariano Previti and Others

Judgment · 18 December 2014 · Netherlands

Refusing deduction, exemption and refund for known evasion without a national rule

The Court held that it is for the national authorities and courts to refuse those rights even in the absence of any provision of national law providing for refusal, where it is established on objective factors that the taxable person knew or should have known that the transaction relied on formed part of evasion committed in a chain of supplies. It further held that the benefit may be refused notwithstanding that the evasion was carried out in a Member State other than the one in which the rights are claimed, and notwithstanding formal compliance with that State's legislation. The strongest statement of the anti-abuse principle in the VAT field.