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Standstill clause EU VAT case law

15 cases of the Court of Justice and the General Court of the European Union on this point of VAT law, from 1999 to 2026.

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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.

T-221/25 TUI Belgium

Judgment · 25 March 2026 · Belgium

Standstill clause and the taxation of travel agents' services for travel outside the EU

No express derogating provision is required. Member States may choose the legislative technique they consider appropriate, subject to legal certainty requiring clarity and precision as to the situations covered. Legislation which merely ceases to exempt, so that taxation follows implicitly, is an exercise of the standstill option. Removing an express derogation that had become redundant does not, of itself, make the new regime non-identical or based on a different logic, since the outcome and procedures are unchanged. The referring court must verify this. Tour operators and travel agents in Member States relying on Article 370 and Annex X, Part A, point 4 cannot found repayment claims on the mere absence of an express statutory derogation from the Article 309 exemption.

C-515/24 Randstad España

Judgment · 12 March 2026 · Spain

Standstill clause and exclusions introduced on the date of accession

Article 176, second paragraph, does not preclude such national legislation. The standstill clause covers an exclusion entering into force on the accession date, provided its scope has not been widened. Here operators lost nothing, since no VAT deduction existed before. The Court added that excluding recreational and representation expenditure matches the Union legislature's own intention in the first paragraph, and that the exclusion was sufficiently precise rather than general. Deductibility for Spanish income tax purposes is irrelevant. Spanish blocks on deduction for sports and entertainment tickets and client, employee and third party hospitality survive, closing off a line of challenge based on the absence of a pre-accession VAT system.

C-837/19 Super Bock Bebidas

Order · 17 September 2020 · Portugal

Standstill exclusions on accommodation, meals, cars and fuel from the date of accession

Ruling by reasoned order, the Court held that those provisions do not preclude such legislation. The standstill in Article 176 allows a Member State to retain the exclusions from the right of deduction that its law provided for at the date of its accession, and the reference point for a State that joined later is the date of accession rather than 1 January 1979. That the expenditure is shown to have been used for taxed transactions does not displace the standstill. Confirms for later accession States the reading already applied to the founding Member States, and explains why blocked input tax on hotels, meals, cars and fuel persists across the Union in patterns that look arbitrary.

C-630/19 PAGE International

Order · 26 February 2020 · Portugal

A partial deduction on food costs is compatible with the standstill clause

The Court holds that they do not preclude such legislation. The second paragraph of Article 176 permits a Member State to retain the exclusions in force at the date of its accession, and a measure that narrows an existing exclusion by allowing a partial deduction moves in the direction the directive intends. It therefore falls within the standstill clause rather than outside it. The order confirms the ratchet built into Article 176.

C-225/18 Grupa Lotos

Judgment · 2 May 2019 · Poland

Standstill clause and the block on deducting VAT on accommodation and catering

Article 168(a) precludes the exclusion in so far as its scope was extended after accession, so a taxable person supplying tourism services cannot be denied deduction on accommodation and catering re-invoiced to other taxable persons. It does not preclude the exclusion, as it stood before accession and was maintained, for a taxable person not supplying tourism services who re-invoices such services. The standstill clause covers adequately defined categories, including strictly business expenditure. Confirms that pre-accession blocks on deduction survive even where the expenditure is wholly business related and is on-charged, provided the category is defined by reference to the nature of the services. Relevant to advisers in Poland and other later acceding States with sectoral deduction blocks, and to groups that recharge hotel and catering costs internally.

C-599/12 Jetair and BTWE Travel4you

Judgment · 13 March 2014

Standstill taxation of travel agents' services for journeys outside the EU

The standstill provisions do not preclude legislation adopted during the transposition period imposing VAT on travel agents' non-EU journeys. The Directive expressly fixed 01-01-1978 as the reference date, so such a law did not seriously compromise its result. A Member State taxing those services on 01-01-1978 need not apply Article 309. Article 370 with Annex X, Part A, point 4 is valid despite the resulting divergence, harmonisation being still partial. Treating margin-scheme travel agents differently from intermediaries is lawful, the two not being comparable. Confirms that Belgium may continue to tax margin-scheme supplies relating to journeys outside the EU, closing off refund claims built on Article 309 for periods since 1978.

C-124/12 AES-3C Maritza East 1

Judgment · 18 July 2013 · Bulgaria

Deduction on costs for hired-in staff and the standstill clause

Deduction cannot be refused merely because the workers are employed by another entity. The link required by Article 168(a) is purely economic, and the legal relationship with the persons working in the undertaking is irrelevant, provided the costs have a direct and immediate link with the taxable person's general costs. The standstill clause does not permit a new exclusion for supplies free of charge introduced on accession. The national court must read domestic law consistently or disapply it. Relevant to any business operating with hired-in, agency or seconded personnel, particularly industrial sites where transport, PPE and workwear are legally required.

C-395/09 Oasis East

Judgment · 30 September 2010 · Poland

Standstill clause and blanket exclusions for services from 'tax havens'

Article 17(6) does not permit a Member State to retain such legislation. The standstill clause presupposes exclusions that were lawful under the Second Directive and does not extend to general exclusions. Member States must sufficiently define the goods and services concerned. A blanket denial keyed to the supplier's place of establishment goes beyond what is authorised. Article 176 draws no different line for post-1979 accession States. The relevant date for Poland is 01-05-2004. Anti-evasion concerns do not widen the derogation. The Article 27 procedure exists for that. Taxpayers in Member States operating blanket, supplier-location-based deduction bans on reverse charge or imported services can challenge them and pursue refunds for periods from accession.

C-460/07 Puffer

Judgment · 23 April 2009 · Austria

Full deduction on mixed-use buildings and the scope of the standstill clause

Articles 17(2)(a) and 6(2)(a) do not breach equal treatment. Any cash-flow advantage flows from the taxable person's status and economic activity, so different rules apply to different situations. Article 87(1) EC does not apply, since the restriction of deduction to taxed transactions derives from the Directive itself, not State intervention. The standstill clause does not cover new rules based on a different logic and new procedures, even where the outcome is equivalent and even if the legislature misread Community law. Whether an unamended parallel exclusion survives depends on its autonomy, for the national court. Confirms that a taxable person allocating a mixed-use building wholly to the business may deduct all input VAT immediately, with private use taxed under Article 6(2)(a). Relevant to property owners and advisers handling mixed-use construction, and to any challenge to grandfathered domestic input tax blocks.

C-74/08 PARAT Automotive Cabrio

Judgment · 23 April 2009 · Hungary

Restriction of input tax deduction on publicly subsidised purchases

The Court held that Article 17(2) and (6) precludes such legislation. The standstill derogation is to be read strictly and, in light of the first subparagraph, permits retention only of exclusions for certain goods or services, not a general restriction applying to any expenditure on acquisition of goods irrespective of nature or purpose. Article 17(2) is sufficiently clear and precise to be invoked directly. The taxable person may recalculate his VAT liability accordingly. Confirms that pro rata deduction rules keyed to grant funding, rather than to the taxable use of the goods, are unlawful, and that accession states cannot shelter blanket exclusions under the standstill clause.

C-414/07 Magoora

Judgment · 22 December 2008 · Poland

Standstill clause and fuel deduction restrictions for leased vehicles

The Court held that wholesale repeal and same-day replacement is not in itself a breach. What matters is whether the new criteria extend the scope of the restrictions, which the national court must determine. A subsequent amendment to legislation in force on the accession date that widens the exclusion compared with the position beforehand is precluded in any event. The referring court must interpret national law consistently with the directive, setting aside contrary provisions if necessary. Confirms that for Member States acceding in 2004 the standstill baseline is the accession date, and that redrafting an exclusion is permissible only if the practical scope does not grow. Relevant to anyone assessing national blocking orders on motor vehicles and fuel, in Poland and in other Member States that reworked such rules on or after accession.

C-371/07 Danfoss and AstraZeneca

Judgment · 11 December 2008 · Denmark

Free canteen meals for staff and business contacts, deduction and deemed supplies

The standstill clause does not permit the exclusion. An administrative practice granting full deduction in exchange for taxation at cost price precludes the authorities from later widening the exclusion. On Article 6(2), the Court distinguished two cases. Meals for business contacts at on-site meetings fall outside it where objective evidence shows strictly business purposes. Meals for staff are in principle caught, unless the needs of the business, such as ensuring meetings run smoothly and without interruption, require the employer to provide them. Both assessments are for the national court. Confirms that administrative practices, not just legislation, fix the scope of a standstill exclusion, so a Member State that has allowed deduction cannot later reinstate a wider restriction. Relevant to any business operating a staff canteen or providing hospitality on its premises.

C-409/99 Metropol and Stadler

Judgment · 8 January 2002 · Austria

Standstill clause and the scope of input tax exclusions on motor vehicles

"National laws" for standstill purposes covers not only legislation in the strict sense but also administrative measures and practices actually applied by the authorities when the directive entered into force (for Austria, 01-01-1995). Withdrawing deduction previously allowed in practice therefore extends existing exclusions and is not covered. Article 17(7) cannot be relied on without prior consultation of the VAT Committee, and does not cover measures with no time limit or forming part of structural budget consolidation. Confirms that pre-accession administrative practice, including binding ministerial circulars, fixes the standstill baseline. Relevant to fleet, leasing and company car deductions in Member States that later tightened vehicle classification rules.

C-40/00 Commission v France

Judgment · 14 June 2001 · France

Reintroducing a deduction exclusion after relaxing it (standstill clause)

The Court declared the infringement established. Where a Member State amends its law to narrow existing exclusions, moving towards the directive's objective, the standstill covers it. Legislation that increases the extent of exclusions applicable immediately before the amendment is not covered, even if it stays within the exclusions in force when the directive entered into force. Environmental motives cannot justify a breach, and the Commission's earlier inaction is irrelevant. Confirms a ratchet: once a Member State relaxes a pre-existing deduction block, that narrower position becomes the new ceiling and cannot be reversed.

C-305/97 Royscot and Others

Judgment · 5 October 1999 · United Kingdom

General exclusion from deduction on car purchases under the standstill clause

The Court held that such general exclusions were lawful under Article 11(4) of the Second Directive and may be retained under Article 17(6). The words "in particular" show the exclusion was never confined to goods capable of private use, so strictly business expenditure, including means of transport constituting the very tool of the trade, may be blocked. The discretion is not unlimited, but excluding a category such as cars does not negate the deduction system. The standstill survives the Council's inaction indefinitely. The ruling confirms that pre-existing national blocking orders on car purchases stand, whatever the commercial necessity of the vehicles and however impossible private use may be.

Related topics

Right of deduction · Restrictions on the right of deduction · Accession to the European Union · Taxable transactions · Supply of services · Exemptions · Origin and scope of right of deduction · National derogations · Special scheme for travel agents · Rules governing exercise of the right of deduction