European Court of Justice, Case C-98/21, “Finanzamt R (Déduction de TVA liée à une contribution d’associé)”: Right of Holding Companies to Deduct Input VAT When Services Obtained from Third Party Services Primarily Relate to VAT-Exempt Activities of Subsidiaries

The European Court of Justice (ECJ) has ruled that Article 168(a) of Council Directive 2006/112/EC of 28 November 2006 on the common system of VAT, in conjunction with Article 167 of this directive, must be interpreted as meaning that a holding company that supplies taxable output services for subsidiaries is not entitled to deduct the input tax charged on the services that it acquires from third parties and supplies to the subsidiaries in return for the grant of a share in the general profit, where:

• The input services have direct and immediate links not with the holding company’s own transactions but with the largely tax-exempt activities of the subsidiaries
• Those services are not included in the price of the taxable transactions carried out in favour of the subsidiaries
• Those services are not part of the general costs of the holding company’s own economic activity

European Court of Justice, Case C-368/21, “Hauptzollamt Hamburg (Lieu de naissance de la TVA - II)”: Place of Supply of Vehicle Imported in Breach of Customs Law

The ECJ has ruled that Articles 30 and 60 of Council Directive 2006/112/EC of 28 November 2006 on the common system of VAT, as amended by Council Directive (EU) 2018/2057 of 20 December 2018, must be interpreted as meaning that for VAT purposes, the place of importation of a vehicle registered in a third country and imported into the European Union (EU) in breach of customs legislation is situated in the member state in which the person who failed to comply with customs obligations resides and actually uses the vehicle.

European Court of Justice, Case C-227/21, “HA.EN”: Right to Deduct Input VAT Relating to Purchases of Immovable Property Where Supplier Did Not Pay Output VAT Because of Financial Status

The ECJ has ruled that Article 168(a) of Council Directive 2006/112/EC of 28 November 2006 on the common system of VAT, read in conjunction with the principle of fiscal neutrality, must be interpreted as precluding a national practice under which, in the context of the sale of an item of immovable property between taxable persons, the purchaser is not allowed to deduct input VAT because they knew or should have known that the vendor was in financial difficulty, or even insolvent, and that that circumstance could result in the vendor not paying or not being able to pay VAT into the public purse.

European Union Implementing Regulation for Payment Service Providers to Transmit Information on Cross-Border Payments

The EU has established detailed rules for the implementation of the Central Electronic System of Payment information (CESOP), with the aim of reducing VAT fraud by requesting payment service providers to transmit information on cross-border payments originating in EU member states and on the beneficiary (the payee) of these cross-border payments.

European Court of Justice, Case C-330/21, “The Escape Center BVBA v Belgische Staat”: Application of Reduced VAT Rate to Individual or Group Coaching

The ECJ has ruled that Article 98(2) of Council Directive 2006/112/EC of 28 November 2006, together with point 14 of Annex III thereto, must be interpreted as meaning that a supply of services consisting of permission to use sporting facilities in a fitness centre and the supply of individual or group coaching may be subject to a reduced VAT rate where that coaching is linked to the use of those facilities and is necessary for the practice of sports and physical education or where that coaching is ancillary to the use of those facilities or to their actual use.

European Court of Justice, Case C-627/21, “S.H. v. Administraţia Judeţeană a Finanţelor Publice Sibiu, Direcţia Generală Regională a Finanţelor Publice Braşov”: Right to Deduct VAT in Cases Where VAT Registration Has Been Cancelled for a Given Period

The ECJ has ruled that Articles 16, 184, 186 to 188, and 192 of Council Directive 2006/112/EC of 28 November 2006, on the common system of VAT, must be interpreted as precluding national rules and practices requiring a taxable person, whose identification for VAT purposes was cancelled for a given period because of the absence of taxable transactions shown in the respective VAT returns filed during six consecutive months, to adjust the input VAT deducted in relation to the purchase of capital goods, without that taxable person being allowed to provide evidence that the substantive conditions for benefitting from the right to deduct are satisfied, on the grounds that there is an irrebuttable presumption that the taxable person used those goods for purposes other than economic activities.

European Court of Justice, Case C-235/21, “RAIFFEISEN LEASING”: Possibility of Treating a Written Contractual Agreement as an Invoice

The ECJ has ruled that Article 203 of Council Directive 2006/112/EC of 28 November 2006, on the common system of VAT, must be interpreted as meaning that a contractual sale-and-lease back agreement, the conclusion of which was not followed by the issue of an invoice by the parties, may be regarded as an invoice, within the meaning of that provision, where that contractual agreement contains all the information necessary for the tax authorities of a member state to be able to establish whether the substantive conditions for the right to deduct VAT are satisfied in the case, which is for the referring court to ascertain.