The opinion of the AG in Case C-133/18, Sea Chefs Cruise Services (VAT – Interpretation of Article 20(2) of Council Directive 2008/9/EC of 12 February 2008)
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On January 17, 2019 on the website of the Court of Justice of the European Union (CJEU) the opinion of Advocate General Hogan in the Case C-133/18, Sea Chefs Cruise Services GmbH versus Ministre de l’Action et des Comptes publics (ECLI:EU:C:2019:37) was published.
Where a taxpayer fails to respond within the one month period stipulated by Council Directive 2008/9/EC of 12 February 2008 laying down detailed rules for the refund of value added tax, provided for in Directive 2006/112/EC, to taxable persons not established in the Member State of refund but established in another Member State to a request for further information from the relevant tax authorities, does this mean that its entitlement to seek a VAT credit is thereby automatically extinguished? This is the essential issue which arises in this request for a preliminary reference.
The present request accordingly concerns the interpretation of Article 20(2) of Directive 2008/9. The request for a reference has been made in proceedings before the Tribunal administratif de Montreuil (Administrative Court, Montreuil, France) between Sea Chefs Cruise Services GmbH (‘Sea Chefs’), a company established in Germany, and the Ministre de l’Action et des Comptes publics (Minister for Public Action and Accounts, France) concerning the decision of the latter to reject Sea Chefs’ claim for the refund of a VAT credit in respect of the period 1 January to 31 December 2014.
By its preliminary question, the referring court seeks in essence to ascertain whether the time limit of one month to provide information laid down in Article 20(2) of Directive 2008/9 constitutes a mandatory time limit, that is to say, a time limit non-compliance with which results in forfeiture of the right to a refund or, alternatively, does this provision admit of an interpretation whereby it is possible to regularise a VAT refund application by adducing evidence in the context of an appeal pursuant to Article 23 of that directive.
CJEU judges in Case C-410/17, A (VAT – Do the services carried out constitute one single transaction or do they comprise two transactions?)
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On January 10, 2019 the Court of Justice of the European Union (CJEU) judged in Case C-410/17 A Oy, intervening party: Veronsaajien oikeudenvalvontayksikkö (ECLI:EU:C:2019:12).
This request for a preliminary ruling concerns the interpretation of Article 2(1)(a) and (c), Article 14(1) and Article 24(1) 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’).
The request has been made in proceedings brought by A Oy concerning the treatment, for the purposes of value added tax (VAT), of transactions made, first, under a demolition contract requiring the service provider to dispose of demolition waste which, as it contains iron, may, pursuant to that contract, be resold by the latter and, second, under a contract for the purchase of goods for dismantling, which includes the obligation for the purchaser to demolish or dismantle (hereinafter referred to collectively as ‘dismantling’) and to dispose of those goods, together with the disposal of the resulting waste.
The opinion of the AG in Case C-607/17, Memira Holding (Freedom of establishment – Deduction of losses of a foreign subsidiary in the State of the parent company in the context of a merger)
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On January 10, 2019 on the website of the Court of Justice of the European Union (CJEU) the opinion of Advocate General Kokott in the Case C-607/17, Skatteverket versus Memira Holding AB (ECLI:EU:C:2019:8) was published.
The point at issue in this case is whether a Swedish parent company has the right, on the basis of Article 49 TFEU in conjunction with Article 54 TFEU, to deduct the losses in a wholly-owned subsidiary established in Germany from its profits if that subsidiary is wound up by way of a merger with the parent company and it was not able fully to ‘use’ its losses made in Germany there.
The fundamental freedoms do not in principle require cross-border use of losses within a group. Losses arising abroad would thus be forfeited. Only in the case of final losses is it possible that cross-border use of losses is necessary, for reasons of proportionality, in accordance with the judgment delivered by the Grand Chamber of the Court of Justice in Marks & Spencer in 2005.
A number of problems have grown up around these ‘final losses’, which have already led to several decisions by the Court. However, the decisions thus far have not been able to clarify definitively the conditions for final losses, as is evident from this new reference. In this regard, the Court will presumably repeatedly be given an opportunity — if it still wishes to adhere to the final losses exception — to refine this category.
The opinion of the AG in Case C-608/17, Holmen (Freedom of establishment – Deduction of losses in a subsidiary in another Member State)
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On January 10, 2019 on the website of the Court of Justice of the European Union (CJEU) the opinion of Advocate General Kokott in the Case C-608/17, Skatteverket versus Holmen AB (ECLI:EU:C:2019:9) was published.
In the present case and one other case, the Court is dealing with the implementation and interpretation of its case-law by the Member States, in this instance the Kingdom of Sweden. The point at issue is whether a Swedish parent company has the right, on the basis of Article 49 in conjunction with Article 54 TFEU, to deduct losses in an indirectly and wholly owned Spanish subsidiary (a sub-subsidiary) from its profits made in Sweden if the sub-subsidiary has been liquidated and was not able to use all its losses in Spain (that is, to set them off against its own or other profits of the Spanish group).
The Grand Chamber of the Court of Justice ruled in 2005 that cross-border use of losses within a group is not required in principle by the fundamental freedoms. Losses arising abroad would be forfeited and could not therefore be used by other members of the group in national territory. Provision is to be made for cross-border use of losses only in the case of final losses in accordance with the principle of proportionality.
A number of problems have grown up around this category of ‘final losses’ created by the Court, which has already led to several decisions by the Court (including two others by the Grand Chamber). However, none of these decisions thus far have been able to clarify definitively the conditions for final losses.
In this regard, the Court has another opportunity — if it still wishes to adhere to the final losses exception — to refine this category.
The Cook Islands joined the Inclusive Framework on BEPS
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On January 3, 2019 the OECD announced that the Cook Islands joined the Inclusive Framework on BEPS. Therewith the total number of jurisdictions that have joined the Inclusive Framework on BEPS comes to 125.
Read more: The Cook Islands joined the Inclusive Framework on BEPS
Finnish – Hong Kong DTA to enter into force
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On December 28, 2018 the Government of the Hong Kong Special Administrative Region issued a press release announcing that the Agreement between the Government of the Hong Kong Special Administrative Region of the People’s Republic of China and the Government of the Republic of Finland for the Elimination of Double Taxation with respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance (which was signed on May 24, 2018) (Hereafter: the DTA) will enter into force on December 30, 2018.
The Netherlands publishes its own list of low-tax jurisdictions
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On December 28, 2018 the Dutch Government published its lis of low-tax jurisdictions. The list consists out of the 5 jurisdictions that are currently on the EU list of non-cooperative jurisdictions for tax purposes and 16 other jurisdictions that Dutch Government considers to be low-tax jurisdictions. These latter are either jurisdictions that do not tax profits, or jurisdictions that do tax profits but that do so against a nominal rate that is lower than 9%.
The list will be used in relation to three Dutch measures to combat tax avoidance.
Read more: The Netherlands publishes its own list of low-tax jurisdictions
New Danish – Japanese DTA entered into force on December 27, 2018
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On November 27, 2018 the exchange of diplomatic notes between the Government of Japan and the Government of the Kingdom of Denmark for entry into force of the Convention between Japan and the Kingdom of Denmark for the Elimination of Double Taxation with respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance (which was signed on October 11, 2017) (Hereafter: the DTA) took place in Copenhagen.
Read more: New Danish – Japanese DTA entered into force on December 27, 2018
The MLI to enter into force with respect to Australia, France, Israel, Japan, Lithuania and the Slovak Republic
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On January 1, 2019 the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI) will enter into force with respect to:
· Australia;
· France;
· Israel;
· Japan;
· Lithuania; and
· The Slovak Republic.
A selection of important tax changes in the Netherlands
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On December 18, 2018 the Dutch Eerste Kamer (the Dutch Senate) adopted the Belastingplan (tax regulations) for 2019. Below we will provide you with an overview of a selection of some important changes to the Dutch tax regulations.
Read more: A selection of important tax changes in the Netherlands
Malta and Singapore deposit their instruments of ratification for the MLI
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On December 21, 2018 the OECD announced that Malta and Singapore have deposited their instruments of ratification for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI). Malta deposited its instrument of ratification for the MLI on December 18, 2018 and Singapore deposited its instrument of ratification for the MLI on December 21, 2018.
Read more: Malta and Singapore deposit their instruments of ratification for the MLI
CJEU judges in Case C-374/17, A-Brauerei (State aid – Germany – Real property transfer tax – Exemption)
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On December 19, 2018 the Court of Justice of the European Union (CJEU) judged in Case C-374/17, Finanzamt B versus A-Brauerei (intervener: Bundesministerium der Finanzen)(ECLI:EU:C:2018:1024).
This request for a preliminary ruling concerns the interpretation of Article 107(1) TFEU.
The request has been made in proceedings between Finanzamt B (tax office of B, Germany) (‘the Finanzamt’) and A-Brauerei concerning the Finanzamt’s refusal to grant A-Brauerei the exemption from the real property transfer tax which may under certain conditions be available, under German tax law, to companies acquiring a right of ownership to property in the context of restructuring procedures within certain groups of companies.
CJEU judges in Case C-414/17 AREX CZ (VAT – Intra-Community acquisitions of goods subject to excise duties)
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On December 19, 2018 the Court of Justice of the European Union (CJEU) judged in Case C-414/17, AREX CZ a.s. versus Odvolací finanční ředitelství (ECLI:EU:C:2018:1027).
This request for a preliminary ruling concerns the interpretation of Article 2(1)(b)(i) and (iii) 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’).
The request has been made in proceedings between AREX CZ a.s. (‘Arex’) and the Odvolací finanční ředitelství (Appellate Tax Directorate, Czech Republic) (‘the Tax Directorate’) concerning the deduction, by Arex, of value added tax (VAT) in respect of purchases of fuel, from Czech suppliers, which was transported under an excise duty suspension arrangement from Austria to the Czech Republic.
CJEU judges in Case C-51/18, Commission v Austria (VAT – Royalty paid to an author of an original work of art on the basis of the resale right)
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On December 19, 2018 the Court of Justice of the European Union (CJEU) judged in Case C-51/18, European Commission, represented by N. Gossement and B.-R. Killmann, acting as Agents, versus applicant, Republic of Austria, represented by G. Hesse, acting as Agent (ECLI:EU:C:2018:1035).
By its application, the European Commission asks the Court to declare that, by imposing value added tax (VAT) on the royalty payable to an author of an original work of art on the basis of the resale right, the Republic of Austria has failed to fulfil its obligations under Article 2(1) 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’).
CJEU judges in Case C-552/17, Alpenchalets Resorts (VAT – Ancillary or principal services – The special scheme for travel agents)
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On December 19, 2018 the Court of Justice of the European Union (CJEU) judged in Case C-552/17, Alpenchalets Resorts GmbH versus Finanzamt München Abteilung Körperschaften (ECLI:EU:C:2018:1032).
This request for a preliminary ruling concerns the interpretation of the first subparagraph of Article 98(2) and Article 306 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’).
The request has been made in the context of proceedings between Alpenchalets Resorts GmbH (‘Alpenchalets’) and the Finanzamt München (Munich Tax Office, Germany) concerning the taxation of the supply of holiday accommodation.
CJEU judges in Case C-422/17, Skarpa Travel (VAT – Payments on account received by a taxable person supplying tourist services, which are taxed under the special scheme for travel agents)
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On December 19, 2018 the Court of Justice of the European Union (CJEU) judged in Case C-422/17, Szef Krajowej Administracji Skarbowej versus Skarpa Travel sp. z o.o. (ECLI:EU:C:2018:1029).
This request for a preliminary ruling concerns the interpretation of Articles 65 and 308 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1), as amended by Council Directive 2010/45/EU of 13 July 2010 (OJ 2010 L 189, p. 1) (‘the VAT Directive’).
The request has been made in the context of proceedings between the Szef Krajowej Administracji Skarbowej (Head of the National Revenue Administration, Poland) and Skarpa Travel sp. z o.o. (‘Skarpa’) concerning a tax opinion issued by the Minister Finansów (Minister for Finance, Poland; ‘the Minister’) relating to the chargeability and method of calculation of value added tax (VAT) in the event of the receipt of a payment on account for a tourist service supplied by a travel agent.
CJEU judges in Case C-17/18, Mailat (VAT – Meaning of a transfer of a business within the meaning of Articles 19 and 29 of Directive 2006/112/EC)
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On December 19, 2018 the Court of Justice of the European Union (CJEU) judged in Case C-17/18, Virgil Mailat, Delia Elena Mailat, Apcom Select SA (ECLI:EU:C:2018:1038).
This request for a preliminary ruling concerns the interpretation of Articles 19 and 29 and Article 135(1)(l) 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’).
The request has been made in criminal proceedings brought against Mr Virgil Mailat, Mrs Delia Elena Mailat and the commercial company Apcom Select SA, of which they were the managers, for tax avoidance, on the ground that, after having deducted input value added tax (VAT) on works carried out in the immovable property used for their commercial activity, they did not adjust the VAT at the time of letting the building in question together with the movable property necessary to pursue that activity.
Non-confidential version of the European Commission's decision concluding that Luxembourg did not give selective tax treatment to McDonald's
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On September 19, 2018 the European Commission issued a press release announcing that following an in-depth investigation which was launched in December 2015, based on doubts that Luxembourg might have misapplied its Double Taxation Treaty with the United States, the Commission has concluded that Luxembourg's tax treatment of McDonald's Europe Franchising does not violate the Double Taxation Treaty with the United States. On that basis the tax rulings granted to McDonald's do not infringe EU State aid rules.
