Bulgaria Authorised to Increase the VAT Exemption Threshold

The European Council has authorised Bulgaria to exempt from VAT taxable persons whose annual turnover does not exceed the local currency amount that corresponds to EUR 51,130 (i.e., BGN 100,000). This measure will be in effect until 31 December 2024.

European Court of Justice, Case C-607/20, “GE Aircraft Engine Services”: The Reward of High-Performing Employees with Vouchers Does Not Qualify as Deemed Supply of Services

The European Court of Justice (ECJ) has ruled that Article 26(1)(b) of Council Directive 2006/112/EC of 28 November 2006 on the common system of VAT must be interpreted as meaning that a supply of services consisting, for a business, in offering retail vouchers to its employees, in the context of a programme set up by that business, designed to recognise and reward the most deserving and high-performing employees, does not fall within its scope. Therefore, granting third-party vouchers to high-performing employees does not qualify as a deemed supply of services for VAT purposes.

European Court of Justice, Case C-596/21, “Finanzamt”: Right to Deduct VAT in Case of VAT Evasion in a Previous Transaction

The ECJ has ruled that Articles 167 and 168 of Council Directive 2006/112/EC of 28 November 2006 on the common system of VAT, as amended by Council Directive 2010/45/EU of 13 July 2010, read in the light of the principle of the prohibition of fraud, must be interpreted as meaning that the second purchaser of goods may be refused the benefit of deducting input VAT on the ground that they knew or ought to have been aware of the existence of VAT fraud committed by the original seller at the time of the first sale, even if the first purchaser was also aware of that fraud.

In addition, the ECJ has ruled these articles, read in the light of the principle of the prohibition of fraud, must be interpreted as meaning that the second purchaser of goods who, at a stage prior to that purchase, were the subject of a fraudulent transaction relating to only part of the VAT that the state is entitled to collect must have the right to deduct the input VAT refused in its entirety where that second purchaser knew or ought to have known that that purchase was linked to fraud.

European Court of Justice, Case C-458/21, “CIG Pannónia Életbiztosí”: Service Used by an Insurance Company to Review the Accuracy of a Diagnosis of a Serious Illness May Be Exempt from VAT

The ECJ has ruled that Article 132(1)(c) of Council Directive 2006/112/EC of 28 November 2006 on the common system of VAT must be interpreted as meaning that services consisting in verifying the accuracy of an insured person’s diagnosis of serious illness, to determine the best possible health care with a view to the insured person’s recovery and to ensure, where that risk is covered by the insurance contract and where the insured person so requests, that the medical treatment is provided abroad, are covered by the exemption provided for in that provision.

European Court of Justice, Case C-141/20, “Norddeutsche Gesellschaft für Diakonie”: Designation of the Controlling Company of a VAT Group as a Single Taxable Person

The ECJ has ruled that the second subparagraph of Article 4(4) of Sixth Council Directive 77/388/EEC of 17 May 1977, as amended by Council Directive 2000/65/EC of 17 October 2000, must be interpreted as not precluding a member state from designating, as a single taxable person of a group formed by persons who are legally independent but closely bound to one another by financial, economic, and organisational links, the controlling company of that group, where that controlling company is in a position to impose its will on the other entities forming part of that group and provided that designation does not entail a risk of tax losses.

In addition, the ECJ has ruled that the second subparagraph of Article 4(4) of Sixth Directive 77/388 must be interpreted as precluding national legislation that makes the possibility for a given entity to form, with the undertaking of the controlling company, a group formed by persons who are legally independent but closely bound to one another by financial, economic, and organisational links conditional upon that controlling company having, in that entity, a majority of the voting rights in addition to a majority holding in the share capital of that entity.

Finally, the second subparagraph of Article 4(4) of Sixth Directive 77/388, read in conjunction with the first subparagraph of Article 4(1) of Directive 77/388, must be interpreted as precluding a member state from classifying, by categorisation, given entities as non-independent, where those entities are integrated, in financial, economic, and organisational terms, into the controlling company of a group formed by persons who are legally independent but closely bound to one another by financial, economic, and organisational links.

List of Gold Coins to Be Considered as “Investment Gold” for VAT Purposes Has Been Published

On 25 November 2022, the European Union (EU) has published in its official journal the list of gold coins to be treated as investment gold under the VAT Directive. According to the applicable regime, the supply of these coins will be VAT exempt for the year of 2023.

European Commission Proposes to Extend the Application of the Increased VAT Exemption Threshold in the Netherlands

According to this proposal, the Netherlands would be authorized to continue to exempt from VAT taxable persons whose annual turnover does not exceed €25,000, until 31 December 2024.