The principle of VAT neutrality in the judgments of the European court
We are still meeting more cases, where the tax administrator does not recognise a used claim on the tax deduction to a company. The only argument is the fact, that its supplier or the supplier of its supplier (we could continue) did not return the tax to the state. Concurrently, the common European VAT system guarantees the whole VAT neutrality and such, as other areas of European regulation, it is based on special principles, which the specific legal adjustment does not reflect.
One of these is the principle of neutrality, which requires that similar situations be not treated differently. Moreover, the VAT should be collected in the most universal way and cover all of types of production and distribution. At the same time, it is inconsistent with the transactions, which should be taxed more times.
This principle follows directly from Section 1, paragraph 2, of the regulation and is mentioned and used more times in its fixed judgment (for example the judgment EDS from the 5th of May of 1982, ref. 15/81 in the matter of Gaston Schul). This principle confirms the conclusiveness of the VAT neutrality in the future judgments, for example:
- judgment C–280/10 from the 1st of March 2012 – deposit of asset into the company, which the depositors (non taxpayers) acquired the VAT
- judgment C–277/14 from the 22nd of October 2015 – acquisition of goods from a non-existing supplier (supplier, who is not filling his obligations)
- judgment C-385/09 from the 21st of October 2010 – the tax deduction by delayed registration for VAT
I am convinced that not only in the light of quoted judgments and in the light of much more, this argumentation of the tax administrator cannot stand.
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