CJEU – Recent Developments in Value Added Tax 2020

S. 881. Introduction

First of all, I want to congratulate the authors of the two introductory papers, Professors Simon Cornielje and Rick Krever; their presentations of the current system, the perspectives of reforms, or comparisons with non-EU systems are very interesting.

My analysis will include three points:

• the inconveniencies of the current system;

• the strict interpretation of the CJEU of the mechanisms which could reduce these inconveniencies; and

• the perspectives of reform.

2. The inconveniencies of the current system

Professor Cornielje writes: “the EU VAT treatment of financial services has been less than ideal”.

I would say “to say the least”, and add that it is very paradoxical because when you associate tax and exemption, it should be the dream except for the tax revenues of the state. Here, it is not the case. Why?

• Because the system of VAT exemption of financial services prevents taxpayers from deducting the input VAT.

• Because this feature incites the taxpayer to imagine artificial mechanisms to circumvent the absence of the right to deduct, which can be qualified as an abusive practice by the CJEU. Remember, namely, the cases Halifax and Huddersfield, and the mechanisms imagined 2...