CJEU – Recent Developments in Value Added Tax 2020

S. 1061. Introduction

As an American commentator in a session devoted to taxable persons under EU VAT rules, I thought it might be appropriate (and, in any event, advisable, given my limited familiarity with the technical questions arising under CJEU case law) to offer a US subnational retail sales tax (RST) perspective on the concept of a taxable person under EU VAT law. As the ensuing discussion will reveal, a more fitting label for my commentary might well be “Lost in Translation” issues between the EU VAT (and, perhaps, more generally a consumption tax implemented by a staged-collection process) and a single-stage consumption tax like the US RST.

2. Consumption tax principles

I begin with a proposition that should command general agreement, namely that any levy designed as a broad-based tax on consumption, and both the VAT and RST fall within this description, is properly understood to mean a tax on final consumption by households. To quote the OECD Guidelines, “[i]n principle, only private individuals, as distinguished from businesses, engage in the consumption at which VAT is targeted.”

So the first question an American observer would ask about the EU VAT is why a “taxable person” is d...