European Court of Justice, Case C-289/22, “A.T.S. 2003”: Refusal of Input VAT Deduction on Supply Chains Connected with VAT Fraud

The European Court of Justice (ECJ) has ruled that the fact the chain of transactions that led to the supply of services appears to be economically irrational or not reasonably justified cannot be regarded as constituting fraud itself. However, the right to deduct VAT can be refused if the tax authority has proven the elements that constitute VAT fraud and a fictitious invoicing chain are in place.

European Court of Justice, Case C-459/21, “The Navigator Company and Navigator Pulp Figueira”: Right to Deduct VAT for Vehicles, Travel and Accommodation, and Entertainment Expenses

The ECJ has ruled that the principle of equivalence must be interpreted as not precluding national legislation, kept pursuant to the second paragraph of Article 176 of Council Directive 2006/112/EC of 28 November 2006, on the common system of VAT, that establishes a total or partial exclusion from the right to deduct VAT incurred in connection with expenses relating to certain vehicles, travel and accommodation, as well as representation expenses, even in case those expenses benefit from an allegedly more favourable regime, as regards their deductibility, within the scope of a direct tax governed by national law.