CJEU - Recent Developments in Value Added Tax 2024

1. Introduction

The keynote paper for session 8 discusses and analyzes four CJEU cases that deal with the right to deduct input VAT. This chapter provides a general comment on the key conclusions drawn in the paper. To a certain extent, these comments accord with this author’s thoughts and comments on the keynote paper for the session on deduction of input VAT of the Vienna CJEU conference of 2024 that are also included in this edition.

2. Comments

The CJEU decided in Feudi that the right to deduct input VAT cannot be denied based on assumptions. It was assumed in this particular case that, if a company’s turnover remains below a national threshold for a certain period of time, it is a non-operating shell company that cannot exercise the right to deduct input VAT.

This right is a fundamental and crucial aspect of the EU VAT system. Notwithstanding the understandable outcome of the Feudi ruling with a view to VAT neutrality and the proportionality that tax authorities should apply in their efforts to prevent fraud and abuse, the CJEU does not fully recognize the fact that, in practice, these shell companies are actually (mis)used for fraudulent claims of input VAT deductions. This autho...