CJEU – Recent Developments in Value Added Tax 2018

S. 15Equality under State aid rules and VAT

Joachim Englisch

1. S. 16Introduction

In matters relating to VAT, it is the fundamental principle of fiscal neutrality that is generally perceived to reflect the principle of equal treatment. However, other equality standards of Union law also have an impact on VAT design, and constitutional scrutiny of European VAT legislation. Some case law exists on the need to respect the general principle of equality, now enshrined in Art. 20 EUCh and previously conceived by the CJEU as a general principle of Union law, also in the field of VAT. Furthermore, the Court has occasionally had to rule on the compatibility of EU VAT legislation with the free movement guarantees of the TFEU, and the free movement of goods and services, in particular. What is often overlooked is the fact that under certain conditions, preferential or advantageous VAT regimes can also be subject to an equal treatment test under the prohibition on fiscal State aid, laid down in Art. 107 (1) of the TFEU. Admittedly, State aid implications of beneficial tax law provisions were generally widely ignored until two decades ago, when the Commission published its “Notice on the application of the ...