CJEU – Recent Developments in Value Added Tax 2014

S. 173Fraud and Abuse in Recent CJEU Case Law on VAT

Michael Lang/Draga Turic

I. S. 174The Cases in 2014

The CJEU rendered four judgments in which the concepts of fraud, evasion or abuse played a role. Three of them came from Bulgaria, a country which, outside VAT, does not have much of a track record in respect of preliminary rulings. We are going to discuss three of the cases: two of the Bulgarian cases and one case from the United Kingdom. The CJEU made some interesting statements in respect of fundamental methodological issues, which we are going to analyse below.

II. Maks Pen, Case C-18/13

A. Facts and Preliminary Questions

In case C-18/13, the CJEU had to deal with the deductibility of input VAT invoiced by suppliers of the Bulgarian company Maks Pen operating as a wholesaler of office supplies and advertising material. The Bulgarian tax authorities queried whether the suppliers in question had the resources to be in a position to supply and whether certain transactions were carried out at all or with parties other than those stated in the invoices. As the tax authorities held that the invoiced transactions were not substantiated, they denied Maks Pen the deduction of the input VAT resulting f...