CJEU – Recent Developments in Value Added Tax 2017
1. Aufl. 2018
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S. 353CJEU Case Law on Input VAT Deduction in 2017 – Comments
Karoline Spies
1. S. 354The Iberdrola Case
The Iberdrola case is of particular importance for those situations where a taxable person pays for development costs of an asset (e.g. immovable property, infrastructure, etc) which is owned by a third person (in particular the state). According to this CJEU judgment, in such a case the fact that the third party (e.g. the state) will also freely benefit from those investments should not be detrimental to the input VAT deduction, as long and insofar as the input costs are “essential” to carry out the economic activity and do not exceed the needs of the taxable person.
Interestingly, this result differs from the opinion delivered by Advocate General Kokott. Advocate General Kokott concluded that Iberdrola should in principle not have a right to input VAT deduction, since the link to the economic activity would be too remote. In order to verify the right to input VAT deduction, the “crucial factor” should be who “actually uses the input”. According to Advocate General Kokott, the supply of the renovation services should be considered to have been directly made to the municipality (as the pump was...