CJEU – Recent Developments in Value Added Tax 2019

S. 2461. Introduction

In 2019, the CJEU decided several cases on the interpretation of the right to deduct input VAT under the European VAT Directive. A substantial number of these cases concerned national measures of Member States or practices of national tax authorities which are aimed at fighting VAT evasion and fraud. The CJEU has ruled that the European VAT Directive promotes the prevention of tax evasion, tax avoidance and potential abuse and that individuals cannot rely on EU law for abusive or fraudulent practices. In other words, the goal of fighting tax avoidance practices of taxpayers is embedded in the DNA of the VAT Directive. The current CJEU case law clearly shows that the Court is trying to strike a balance between VAT neutrality and the fight against abusive behaviour.

The first section of this paper will set out the CJEU cases on Member State national measures and tax authority practices in fighting VAT avoidance and abuse. The second section will turn to the CJEU’s case law on the taxable person’s right to claim recovery directly from the Treasury of VAT that was paid but ultimately not due, in cases in which the supplier has declared insolvency. The third and fourth sec...