CJEU - Recent Developments in Value Added Tax 2017

1. S. 282Taxable Amount

1.1. Art. 90 VAT Directive

Art. 90(1) of the VAT Directive distinguishes between the terms “cancellation”, “refusal”, “total or partial non-payment” and situations “where the price is reduced after the supply takes place”. These terms seem to be inspired by a civil law understanding. Differentiation between these terms is necessary, because Art. 90(1) and (2) grant (or seem to grant) the Member States a different level of discretion for these situations: In the case of “cancellation”, “refusal” and situations “where the price is reduced after the supply takes place”, Member States are obliged to allow for a reduction of the taxable amount (“shall”); however, they are permitted to set proportionate “conditions”. By contrast, according to Art. 90(2) Member States “may derogate” from this obligation in the event of “total or partial non-payment”. In the light of these provisions there are two major issues: first: how to define the terms and, hence, delimit the scope of Art. 90(2), and second, whether the right for Member States to set “conditions” and the right for Member States to “derogate” from the obligation to allow for a reduction is to be interpreted differently...