ECJ - Recent Developments in Value Added Tax

S. 160I. Introduction

As the CJEU’s case law develops in the field of VAT, it is possible to say that its methodology is becoming more structured, more ‘scientific’. Scientific methodology can be described as a method of procedure that consists of systematic observation, measurement, and experiment, and the formulation, testing, and modification of hypotheses. In a dispute, it is too easy to look through the surface, and hunt for real substance in a matter. The scientific approach suggests we stop and ask whether the situation we find ourselves in is the ‘plain vanilla’ 95% of the situations, and not an ‘exotic’ one. If it is, then a scientific ‘toolkit’ approach may be useful to understand how the case was resolved.

The purpose of this article is to identify the core propositions of law in the field of indirect taxation, which can be applied to any particular factual situations, to determine the outcome of a particular problem in VAT.

In the author’s view, Axa, concerning the VAT liability of debt collection services, is the case which best illustrates this ‘scientific’ approach. If this approach is obvious to the reader, particularly from a civil lawyer’s perspective, then please forgive ...