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:

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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