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On October 26, 2017 on the website of the Court of Justice of the European Union (CJEU) the opinion of Advocate General Campos Sánchez-Bordona in the Case C-533/16, Volkswagen AG versus Finančné riaditeľstvo Slovenskej republiky (ECLI:EU:C:2017:823) was published.
The Court of Justice has examined the right to deduct value added tax (VAT) many times in response to requests for preliminary rulings. In this case, the question raised by the referring court concerns the time limit for making that deduction.
The problem faced by the national court stems from the fact that, between 2004 and 2010, Volkswagen AG received goods from certain suppliers without VAT being included in the relevant invoices. Both parties had wrongly assumed that the transactions in question constituted financial compensation and, as such, were not subject to VAT.
When, in 2010, they realised their mistake, the suppliers charged the VAT to Volkswagen and did then issue the relevant invoice stating the amount of tax payable. They also filed a supplementary VAT return and paid the tax to the Treasury. Volkswagen sought to deduct the input VAT but the tax authority allowed the application only in respect of some of the periods claimed, rejecting it in the case of the other periods on the basis that the time limit for exercising the right (five years) had already elapsed.
The preliminary ruling proceedings will therefore allow the Court of Justice to decide to what extent the right of deduction applies where VAT was not charged at the time the goods were originally supplied and the subsequent adjustment affects tax periods dating back more than five years.
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On October 26, 2017 the European Commission announced that it opened an in-depth investigation into the UK Group Financing Exemption. In a press release issued in this respect the European Commission states that it has doubts whether the Group Financing Exemption complies with EU State aid rules. In particular, the Commission has doubts whether this exemption is consistent with the overall objective of the UK CFC rules.
The UK's Group Financing Exemption was introduced with the reform of the UK CFC regime under the Finance Act 2012. In order to benefit from the tax exemption, companies do not need a tax ruling. The scheme entered into force on January 1, 2013.
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On October 26, 2017 the European Commission opened a public consultation on fair taxation of the digital economy. The consultation runs until January 3, 2018. The contributions received and a report made as follow-up thereto will be published on DG TAXUD's webpage in the first quarter of 2018
Objective
The objective of the consultation is to define an approach to the taxation of the digital economy. The approach should meet the goals of fairer and more effective taxation, supporting public revenue and a level playing field across businesses. It should also facilitate an efficient taxation, supporting EU growth and competitiveness through the Digital Single Market.
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On October 25, 2017 the OECD published a press release announcing that on that same date Peru signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. By doing so, Peru became the 114th signatory to the convention.
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On October 26, 2017 the Court of Justice of the European Union (CJEU) judged in Case C-534/16, Finančné riaditeľstvo Slovenskej republiky versus BB construct s. r. o. (ECLI:EU:C:2017:820).
This request for a preliminary ruling concerns the interpretation of Article 273 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1, ‘the VAT Directive’) and the concept of ‘freedom to conduct a business’, the principle of equal treatment, the principle ne bis in idem and the principle of non-retroactivity of offences and penalties, enshrined in the Charter of Fundamental Rights of the European Union (‘the Charter’).
The request has been made in proceedings between the Finančné riaditeľstvo Slovenskej republiky (Tax Directorate of the Slovak Republic, ‘the tax directorate’) and BB construct s. r. o. concerning a guarantee required at the time of registration of the latter for the purposes of value added tax (VAT).
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