CJEU - Recent Developments in Value Added Tax 2022

During the period under review the CJEU adopted several decisions concerning the right of taxable persons to deduct the VAT incurred on their inputs, from which a selection had to be made. Most of these decisions are largely based on previous case law and preserve the neutrality of the VAT system (the only regrettable thing in these cases is that the CJEU voluntarily omits clarifying issues that have been raised in the advocate general’s opinions). In one case, however, the CJEU interprets the VAT Directive provisions concerning adjustments in a way that, in this author’s view, deprives unsuccessful businesses from their right to a VAT neutral treatment.

S. 2861. Vittamed (C-293/21)

1.1. Facts and question raised

Vittamed was a company established in Lithuania. In 2012 and 2013, the company acquired goods and services in connection with the realization of an international project funded by the European Union, the objective of which was to develop and market a prototype of a medical diagnostic and monitoring device. Vittamed deducted EUR 87 987 of input VAT paid for the supply of those goods and services, and used those goods and services to produce intangible capital goods (licences) and ta...