Oct 25

Opinion of the Advocate General expected to be delivered in joined Cases C-398/16 (X) & C-399/16 (X) (Freedom of establishment – Dutch regulations regarding denying interest deduction with respect to loans obtained by a parent company in association with capital contributions/investments made in a qualifying subsidiaries)

Questions referred for a preliminary ruling:

Question referred in Case C-398/16

Must Articles 43 EC and 48 EC (now Articles 49 TFEU and 54 TFEU) be interpreted as precluding national legislation on the basis of which a parent company established in a Member State is not allowed to deduct interest in respect of a loan associated with a capital contribution made to a subsidiary established in another Member State, whereas that deduction could have been availed of if that subsidiary had been included with that parent company in a single tax entity — with characteristics such as those of a Netherlands single tax entity — in view of the fact that, in that case, by reason of consolidation, there would be no obvious association with such a capital contribution?

Questions reffered in Case C-399/16

1.     Must Articles 43 EC and 48 EC (now Articles 49 TFEU and 54 TFEU) be interpreted as precluding national legislation on the basis of which a parent company established in a Member State cannot take into account a currency loss in connection with the amount which it has invested in a subsidiary established in another Member State, whereas it would be able to do so if that subsidiary were to be included in a single tax entity — with characteristics such as those of the Netherlands single tax entity — with that parent company established in the first-mentioned Member State, as a result of consolidation within the single tax entity?

2.     If the answer to Question 1 is in the affirmative: can or must the point of departure for determining the currency loss to be taken into account be that (one or more of) the direct and indirect subsidiaries indirectly held by the parent company concerned, through the subsidiary in question, and established in the European Union, should also be included in the single tax entity?

3.     If the answer to Question 1 is in the affirmative: should account be taken only of currency losses that would have been reflected on the parent company’s inclusion in the single tax entity in the years to which the dispute relates, or should the currency exchange results that would have been reflected in earlier years also be taken into account?

Oct 26

CJEU expected to deliver judgment in Case C-39/16, Argenta Spaarbank (Articles 1(2), 3(2) and  4(2) of the Parent-Subsidiary Directive – Deductibility of interest costs relating to the holding)

Questions referred for a preliminary ruling:

1.     Does Article 198 point 10 of the 1992 Income Tax Code, in the version which was in force for the 2000 and 2001 tax years, violate Article 4(2) of the Parent-Subsidiary Directive, in so far as that Article provides that interest may not be regarded as a business expense up to an amount corresponding to the amount of the dividends qualifying for exemption under Articles 202 to 204 where those dividends are derived from shares which, at the time of their transfer, had not been held for an uninterrupted period of at least one year, in which connection no distinction is made according to whether those interest payments relate to (the financing of) the holding from which the dividends qualifying for exemption were derived or not?

2.     Is Article 198(10) of the Income Tax Code, in the version which was in force for the 2000 and 2001 tax years, a provision for the prevention of tax evasion and abuses within the meaning of Article 1(2) of the Parent-Subsidiary Directive and, if so, does Article 198(1) of the Income Tax Code go beyond what is necessary for the prevention of such tax evasion or abuses when it provides that interest is not to be regarded as a business expense up to an amount corresponding to the amount of the dividends qualifying for exemption under Articles 202 to 204, where those dividends are derived from shares that, at the time of their transfer, had not been held for an uninterrupted period of at least one year, in which connection no distinction is made about whether those interest payments relate to (the financing of) the holding from which the dividends qualifying for exemption were derived or not?

More information regarding the Opinion of the Advocate General in this case can be found here

Oct 26

CJEU expected to deliver judgment in Case C-90/16, The English Bridge Union (VAT – Is a physical element necessary for an activity to be a ‘sport’ within the meaning of Article 132(1)(m) of Council Directive 2006/112/EC?)

Questions referred for a preliminary ruling:

(1)   What are the essential characteristics which an activity must exhibit in order for it to be a “sport” within the meaning of Article 132(1)(m) of [the VAT Directive]? In particular must an activity have a significant (or not insignificant) physical element which is material to its outcome or is it sufficient that it has a significant mental element which is material to its outcome?

(2)   Is duplicate contract bridge a “sport” within Article 132(1)(m) of the ... VAT Directive?

More information regarding the Opinion of the Advocate General in this case can be found here

Oct 26

Opinion of the Advocate General expected to be delivered in Case C-533/16,  Volkswagen (VAT – What conditions have to be satisfied to exercise the right to a VAT refund?)

Questions referred for a preliminary ruling:

1.     Must Directive 2008/9 and the right to a tax refund be interpreted to the effect that the cumulative satisfaction of two conditions is required to exercise the right to a VAT refund, namely:

a.     the supply of the goods or service and

b.     the inclusion of VAT on the invoice by the supplier?

In other words, is it possible for a taxable person who has not been charged VAT on an invoice to claim a tax refund?

2.     Is it in accordance with the principle of proportionality or VAT fiscal neutrality for the time-limit for the tax refund to be calculated from a point at which not all the substantive law conditions required to exercise the right to a tax refund were satisfied?

3.     Are Articles 167 and 178(a) of the VAT Directive, in the light of the principle of fiscal neutrality, to be interpreted to the effect that, in circumstances such as those of the present case, and assuming that the other substantive law and procedural law conditions required to claim a right to a tax deduction are satisfied, they preclude an approach by the tax authorities which refuses the taxable person the right, claimed within the time-limit under Directive 2008/9, to be refunded VAT which was charged to it by the supplier on the invoice and removed by the supplier before the expiry of the limitation period for relying upon the right under national law?

4.     Did the Slovak tax authorities, in the light of the principle of neutrality and the principle of proportionality, which are the fundamental principles of the common system of VAT, exceed the limits of what was necessary for achieving the objective defined by the VAT Directive when they refused the taxable person the right to a refund of the deducted tax on the ground that the limitation period laid down by national law for claiming a tax refund had expired, even though the taxable person could not exercise its right to a tax refund within that period and even though the tax was correctly collected and the risk of tax evasion or non-payment of the tax had been completely excluded?

5.     May the principles of legal certainty, legitimate expectations and the right to good administration under Article 41 of the Charter of Fundamental Rights of the European Union be interpreted as precluding an interpretation of the national legislation under which, for the purposes of observance of the time-limit for claiming a tax refund, the time of the decision of the administrative authority on the tax refund is decisive, and not the time at which the tax refund is claimed by the taxable person?

Oct 26

CJEU expected to deliver judgment in Case C-534/16, BB construct (VAT – Article 273 of Council Directive 2006/112/EC)

Questions referred for a preliminary ruling:

Is it possible to interpret as in accordance with the objective of Article 273 of Council Directive 2006/112/EC 1 of 28 November 2006 on the common system of value added tax, that is, the prevention of VAT evasion, an approach on the part of a national body which considers the fact that the current director of a legal person was also the director of another legal person which has outstanding tax liabilities to be a ground under national law for requiring payment of a tax deposit of up to the value of EUR 500 000?

May it be held that the abovementioned tax deposit, given its amount, which may be up to the value of EUR 500 000 as in the present case, is consistent with the freedom to conduct a business under Article 16 [of the Charter of Fundamental Rights of the European Union], does not directly force the taxable person to declare bankruptcy, does not constitute discrimination under Article 21(1) [of the Charter] and does not constitute a breach, in the area of the levying of VAT, of the ne bis in idem principle or of the prohibition on retroactivity under Article 49(1) and (3) of the Charter?