CJEU - Recent Developments in Value Added Tax 2016

1. S. 192Introduction

The VAT treatment of activities carried out by public bodies or more generally speaking, financed by public authorities, has traditionally been a source of debate and disagreement between those entities and the tax authorities. We only have to look at decisions of the European Court of Justice (CJEU) issued from 2014 to 2016 regarding this topic to find cases referred to the CJEU from France, Portugal, Czech Republic, Hungary, The Netherlands and Ireland. This list of Member States in which, in the last two years, debate has arisen on the VAT treatment of activities of public bodies or on activities financed by public bodies, is in itself illustrative of how protracted the debates are and how difficult it is to offer an overall solution. Before starting to comment on the recent rulings of the CJEU in this regard, it is fair to recognize that these complex debates make very little sense in terms of public budget.

As Advocate General Kokott has remarked in her opinion in the case “Gemeente Borsele” where the discussion focused on whether a Dutch municipality was carrying out an economic activity and consequently whether that municipality had the right to deduct the VAT ...