Special scheme for small enterprises 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 2010 to 2024.

Search within this topic The cases ↓

Provisions these cases interpret most

Article 282 of Directive 2006/112/EC Exemptions · 3 of these cases
Article 281 of Directive 2006/112/EC Simplified procedures for charging and collection · 2 of these cases
Article 288 of Directive 2006/112/EC Exemptions · 2 of these cases
Article 11 of Directive 2006/112/EC Taxable persons · 1 of these cases
Article 1 of Directive 2006/112/EC Subject matter and scope · 1 of these cases
Article 19 of Directive 2006/112/EC Supply of goods · 1 of these cases
Article 28 of Directive 2006/112/EC Supply of services · 1 of these cases
Article 80 of Directive 2006/112/EC Supply of goods or services · 1 of these cases

The 7 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-171/23 UPCAFFE

Judgment · 4 October 2024 · Croatia

Abuse of rights and the small enterprise exemption

National authorities and courts must refuse the exemption in that situation. Where formation of the company is established to be an abusive practice designed to maintain the Article 287(19) exemption for an activity previously carried on under that scheme by another company, the benefit must be refused, with no specific national legal basis required. Refusal imposes no obligation under the directive. The objective conditions simply are not met. The referring court must verify the abuse and redefine the transactions no further than necessary, allowing input tax deduction where conditions are satisfied. Confirms that Italmoda and Cussens extend beyond deduction, exemption and refund to the small enterprise scheme, so a Member State need not have enacted a general anti-abuse rule to deny it.

C-122/23 Legafact

Judgment · 11 April 2024 · Bulgaria

Small enterprise exemption and late VAT registration

The Court held that the Directive does not preclude national legislation making the small enterprise exemption conditional on lodging a registration application within a prescribed period, nor the different starting points for the twelve month and two month groups, both falling within the Member States' discretion. A charge that merely recovers VAT which would have been due had registration been timely is not a penalty. In so far as it goes beyond that recovery, the national court must test it against effectiveness and proportionality. Confirms wide national latitude in designing registration mechanics around the small enterprise threshold, including different triggers for seasonal or fast growing turnover. Relevant to consultancies, seasonal traders and any newly liable person registering late in Bulgaria and similarly structured regimes.

C-716/18 AJPF Caraş-Severin and DGRFP Timişoara

Judgment · 9 July 2020 · Romania

Ancillary real estate transactions and the small enterprise threshold

For a natural person carrying on several liberal professions and letting immovable property, the letting is not an ancillary transaction where it is carried out in the context of his usual business activity. No principal activity need be identified, and no connection with another activity is required. "Ancillary" is an autonomous EU concept covering transactions outside the taxable person's usual business activity, aligned with Article 174(2). Whether the letting is exempt, and whether it forms part of usual activity, is for the national court. Relevant to small unregistered businesses and sole practitioners in Member States operating turnover thresholds, and to their advisers computing that turnover.

C-388/18 B (Turnover of a dealer in second-hand vehicles)

Judgment · 29 July 2019 · Germany

Turnover threshold for small enterprises where the margin scheme applies

Article 288 precludes national legislation or practice calculating the reference turnover using only the profit margin. The word "taxed" qualifies the supplies, not their value, so it is enough that the supplies are taxed, however they are taxed. Turnover must be based on all amounts (excluding VAT) received or to be received. The small enterprise scheme and the margin scheme are autonomous and independent. Neither imports concepts from the other. For dealers in second-hand goods, works of art, collectors' items and antiques the small enterprise threshold is measured on gross receipts, not on margin.

C-265/18 Jarmuškienė

Judgment · 2 May 2019 · Lithuania

Small enterprise threshold and a single supply of two properties

Where a supply to the same purchaser comprises two items of immovable property linked by their nature and covered by a single contract of sale, and the turnover limit is exceeded, VAT is due on the value of the entire supply, even though one item alone would not have breached the limit. Separately stated prices do not permit splitting. There is a single supply under Article 14(1) and dividing it would be artificial. The Court expressly left open the treatment of earlier transactions. Relevant to advisers dealing with property developers and occasional builders operating under national small enterprise exemptions.

C-566/16 Vámos

Judgment · 17 May 2018 · Hungary

Retroactive election into the small enterprise exemption

EU law does not preclude national legislation refusing the small enterprise exemption to a taxable person who satisfies all the substantive conditions but did not opt for the scheme when declaring commencement of activity. Adopting the scheme is optional for Member States, which may attach procedural conditions under Article 273. Refusing retroactive election is proportionate, since assessing VAT on past sales is recovery of tax due, not a penalty. Allowing late election would give an undue competitive advantage over compliant traders and offend neutrality and legal certainty. Businesses that trade unregistered and are later caught cannot elect into a small enterprise exemption retrospectively, even where turnover was always below the threshold.

C-97/09 Schmelz

Judgment · 26 October 2010 · Austria

Small undertakings exemption limited to established persons

The exclusion does restrict the freedom to provide services, but it is justified and proportionate. Effective fiscal supervision is only feasible in the State of establishment, small undertakings are typically not VAT identified there, and existing administrative cooperation instruments yield no usable turnover data. The provisions are therefore valid under Article 49 EC. "Annual turnover" means the turnover generated in one year in the Member State in which the undertaking is established, not Union-wide turnover. Non-established persons with modest taxable activity in another Member State, notably individuals letting residential property abroad and small cross-border service providers, cannot claim the host State's small business exemption and must register and account for VAT there from the first euro, with input deduction as the only offset.