CJEU - Recent Developments in Value Added Tax 2022

1. Introduction

VAT fraud cases have kept the European Court of Justice busy. Even when confining the topic of cases to only business to business (B2B), the Court had to decide dozens and dozens of these. This reflects the fact that VAT fraud causes huge losses for governments. One quarter of the EU VAT gap, i.e. the difference between expected VAT revenues and those actually collected, of EUR 93 billion in 2020 was attributed to EU-trade VAT fraud alone; to this, domestic B2B fraud needs to be added. Governments in turn seek to take counter-measures often in fragmented ways that threaten the internal market. However, VAT fraud also poses grave dangers for taxpayers. In theory, the neutrality of the VAT as the cornerstone of tax demands that taxable persons supplying goods and services be relieved of input VAT on purchased supplies. Moreover, insult should not be added to injury. Bona fide taxpayers who have fallen prey to fraud should therefore not suffer adverse VAT consequences. In the face of VAT fraud, the Court of Justice, S. 2however, has severely limited the portent of the neutrality principle in two directions.

First, the Court has relied on the prohibition of abuse of law also ...