On December 5, 2017 the Economic and Financial Affairs Council (ECOFIN) adopted new rules regarding VAT on electronic commerce. The final versions of these new rules (a Council Directive, a Council Regulation and a Council Implementing Regulation) were published in the Official Journal of the European Union of December 29, 2017.

On December 20, 2017 the Swiss Federal Council initiated a consultation on the implementation of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI). The consultation will run until April 9, 2018.

On December 21, 2017 the OECD issued a press release announcing that on December 20, 2017 Curaçao signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI). By doing so Curaçao became the 72 signatory to the MLI.

The OECD has announced that on December 19, 2017 Qatar has signed the Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports (CbC MCAA). The total number of signatories of the CbC MCAA therewith went up to 68.

On December 20, 2017 on the website of the Court of Justice of the European Union (CJEU) the opinion of Advocate General Bobek in the Case C-532/16, SEB bankas (ECLI:EU:C:2017:1019) was published.

Akcinė bendrovė SEB bankas (‘SEB bankas’) purchased plots of land from VKK Investicija UAB (‘the Seller’) for which the latter issued an invoice for payment — inclusive of value added tax. At the time of the sale, both parties considered the land at issue to be ‘building land’, and subject to VAT. Subsequently, SEB bankas obtained a deduction corresponding to the VAT charged.

 

Three years later, the Seller took the view that the supply of land at issue should actually have been exempted from VAT. It therefore sent SEB bankas a credit note for the original amount invoiced. It also issued a new invoice for the same amount which did not include any VAT.

 

On the basis of a subsequent tax inspection, the Valstybinė mokesčių inspekcija prie Lietuvos Respublikos finansų ministerijos (State Tax Inspectorate attached to the Ministry of Finance, Lithuania) (‘State Tax Inspectorate’) issued a decision that required SEB bankas to reimburse the amount corresponding to the deduction initially granted. It also required payment of a part of the accrued default interest, and imposed a fine.

 

The case eventually came before the Lietuvos vyriausiasis administracinis teismas (Supreme Administrative Court, Lithuania). That referring court now enquires whether or not the recovery sought from SEB bankas falls under the mechanism of adjustment of deductions provided for in the VAT Directive. It further asks about the relevance of the credit note issued by the Seller and also of the fact that the reclassification of the land at issue occurred following a change in the practice of the tax administration for the determination of SEB bankas’s tax obligations.

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