CJEU – Recent Developments in Value Added Tax 2018

S. 145The VAT treatment of public bodies: some comments

Donato Raponi

The EU VAT system is often perceived as excessively complex, notably due to the taxation/exemption approach. The VAT treatment of “public bodies” reinforces this complexity, especially when, moreover, the directive places some of their activities outside the scope of VAT.

As a matter of principle, the supplies of goods and services made by taxable persons acting as such are within the scope of the Directive, which means that “public bodies” are in principle within the scope of VAT; their activities will be taxable (taxed or exempted). It is only when they are performing activities as “public authorities” (when they are engaged as public authorities) that they will be placed outside the scope of VAT.

The activities of “public bodies” have been the subject of an important jurisprudence. Even if the Court has given some guidance, it is hazardous to say that the legal uncertainty has been completely removed, especially since the interpretation is largely left to national juridictions and the approach taken by the Court has often been restrictive.

Many questions have been submitted to the CJEU, especially concerning the interpre...