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On April 19, 2018 the Court of Justice of the European Union (CJEU) judged in Case C-580/16, Firma Hans Bühler KG versus Finanzamt Graz-Stadt (ECLI:EU:C:2018:261).

This request for a preliminary ruling concerns the interpretation of Article 141(c) and Articles 42 and 265 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 (JO 2010 L 189, p. 1) (‘the VAT Directive’), read in conjunction with the first paragraph of Article 41 and Articles 197 and 263 of the VAT Directive.

The request was made in the course of a dispute between Firma Hans Bühler KG and the Finanzamt Graz-Stadt (City of Graz Tax Office, Austria) concerning the payment of value added tax (VAT) on transactions carried out between October 2012 and March 2013.

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On June 7, 2017 the UK signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI). The UK has not yet deposited its instrument of ratification, acceptance or approval. Although the MLI will enter into force as per July 1, 2018, like for all other jurisdictions that have not yet deposited their instrument of ratification, acceptance or approval, the MLI will enter into force in the UK on the first day of the month following the expiration of a period of 3 calendar months beginning on the date of the deposit by the UK of its instrument of ratification, acceptance or approval.

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On February 2, 2018 the Vestre Landsret (the High Court of Western Denmark) lodged a request for a preliminary ruling with the Court of Justice of the European Union (CJEU) in the Case C-71/18, Skatteministeriet (Danish Ministry of Taxation) versus KPC Herning. The question referred for a preliminary ruling has been published in the Official Journal of the European Union of April 16, 2018.

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On April 12, 2018 the Court of Justice of the European Union (CJEU) judged in Case C-8/17, Biosafe — Indústria de Reciclagens SA versus Flexipiso — Pavimentos SA (ECLI:EU:C:2018:249).

This request for a preliminary ruling concerns the interpretation of Articles 63, 167, 168, 178 to 180, 182 and 219 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 also of the principle of fiscal neutrality.

The request has been made in proceedings between Biosafe — Indústria de Reciclagens SA (‘Biosafe’) and Flexipiso — Pavimentos SA (‘Flexipiso’) concerning the latter’s refusal to reimburse Biosafe the additional value added tax (VAT) that it had paid following a tax adjustment.

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On April 11, 2018 the Court of Justice of the European Union (CJEU) judged in Case C-532/16, Valstybinė mokesčių inspekcija prie Lietuvos Respublikos finansų ministerijos versus SEB bankas AB (ECLI:EU:C:2018:228).

This request for a preliminary ruling concerns the interpretation of Articles 184 to 186 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 the Valstybinė mokesčių inspekcija prie Lietuvos Respublikos finansų ministerijos (State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania; ‘the tax authority’) and SEB bankas AB concerning a revised assessment to tax to which the latter company was subject for the purpose of adjusting the deduction, made by that company, of value added tax (VAT) which it had paid upon a purchase of land.

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On April 10, 2018 on the website of the Court of Justice of the European Union (CJEU) the opinion of Advocate General Bobek in the Case C-154/17, SIA ‘E LATS’ (joined parties: Valsts ieņēmumu dienests) (ECLI:EU:C:2018:226) was published.

SIA ‘E LATS’ is a trader and a taxable person for the purposes of VAT. It offers loans to individuals against security in the form of goods containing precious metals or precious stones. Unredeemed pledges are resold by SIA ‘E LATS’ to other traders, principally for the extraction of precious metals or precious stones. Those traders are liable to pay VAT.

 

A special VAT regime for second-hand goods was applied by SIA ‘E LATS’ to those resale transactions. The competent tax authority, however, did not agree that that special regime was applicable. It found that the goods resold by SIA ‘E LATS’ were not second-hand goods within the meaning of the applicable tax legislation. As a result it required SIA ‘E LATS’ to pay an additional amount of VAT.

 

It is in this context that the Augstākā tiesa (Supreme Court, Latvia) has asked the Court to provide the interpretation of the specific provision of Directive 2006/112/EC (‘the VAT Directive’) that regulates the VAT applicable to second-hand goods. In particular, the referring court enquires about the scope of the ‘precious metals or precious stones’ exception found in the definition of ‘second-hand goods’. It also asks whether certain features of the resale transaction affect the scope of that exception.

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Yesterday we published an article on the 13 country profiles focusing on key aspects of domestic transfer pricing legislation that the OECD released on April 9, 2018. In a press release the OECD issued in this respect it stated that it had released 14 instead of 13 Transfer Pricing Country Profiles on April 9, 2018. In this press release the OECD stated that it had also released the Transfer Pricing Country Profile of Portugal. The OECD webpage containing links to the different Transfer Pricing Country Profiles however did not contain a link to a Transfer Pricing Country Profile of Portugal (and at this moment (11.15 CET; April 10, 2018) still does not seem to contain such a link).

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The OECD has a webpage where it published transfer pricing country profiles of several countries (44 as per April 9, 2018). These country profiles focus on countries' domestic legislation regarding key transfer pricing principles, including the arm's length principle, transfer pricing methods, comparability analysis, intangible property, intra-group services, cost contribution agreements, transfer pricing documentation, administrative approaches to avoiding and resolving disputes, safe harbours and other implementation measures. The information contained in these profiles is intended to clearly reflect the current state of countries' legislation and to indicate to what extent their rules follow the OECD Transfer Pricing Guidelines.

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On April 5, 2018 the OECD released the second edition of its Common Reporting Standard (CRS) Implementation Handbook (Hereafter: the Handbook). The purpose of the Handbook is to provide practical guidance to assist government officials and financial institutions in the implementation of the CRS and to provide a practical overview of the CRS to both the financial sector and the public at-large.

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On November 17, 2017 the Finanzgericht München (Germany) lodged a request for a preliminary ruling regarding the freedom of movement of capital under Article 63(1) TFEU in conjunction with Article 65 TFEU. The request was filed in Case C-641/17, College Pension Plan of British Columbia versus Finanzamt München III.

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On December 18, 2017 the European Commission announced that it opened a has opened an in-depth investigation into the Dutch tax treatment of Inter IKEA. On March 27, 2018 the non-confidential/public version of this decision was made available in the State Aid Register on the European Commission's competition website.

the European Commission is going to investigate whether the transfer prices agreed upon reflect economic reality (in line with arrangements that take place under comparable conditions between independent companies). Therefore the European Commission is going to investigate two tax rulings that Inter IKEA Systems concluded with the Dutch tax authorities. On ruling stems from 2006, the second one from 2011.

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On March 22, 2018 the OECD released a report providing additional guidance on the attribution of profits to permanent establishments (BEPS Action 7).

The report contains additional guidance on the attribution of profits to permanent establishments resulting from the changes in the Report on BEPS Action 7 to Article 5 of the OECD Model Tax Convention. The additional guidance sets out high-level general principles for the attribution of profits to permanent establishments arising under Article 5, Paragraph 5, in accordance with applicable treaty provisions. It also includes additional guidance related to permanent establishments created as a result of the changes to Article 5, Paragraph 4.

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On March 22, 2018 the Court of Justice of the European Union (CJEU) judged in joined Cases C‑327/16 (Marc Jacob versus Ministre des Finances et des Comptes publics) and C‑421/16 (Ministre des Finances et des Comptes publics versus Marc Lassus) (ECLI:EU:C:2018:210).

These requests for a preliminary ruling concern the interpretation of Article 8 of Council Directive 90/434/EEC of 23 July 1990 on the common system of taxation applicable to mergers, divisions, transfers of assets and exchanges of shares concerning companies of different Member States (OJ 1990 L 225, p. 1), as amended by the Act concerning the conditions of accession of the Kingdom of Norway, the Republic of Austria, the Republic of Finland and the Kingdom of Sweden (OJ 1994 C 241, p. 21), as adjusted by Decision 95/1/EC, Euratom, ECSC of the Council of the European Union of 1 January 1995 (OJ 1995 L 1, p. 1) (‘the Merger Directive’), and Article 49 TFEU. 

The requests have been made in the course of proceedings between, in the first case, Mr Marc Jacob and the ministre des Finances et des Comptes publics (Minister for Finance and Public Accounts, France) (‘the tax authorities’) and, in the second case, the tax authorities and Mr Marc Lassus, in relation to the tax authorities’ decisions to tax the capital gains resulting from an exchange of securities upon the subsequent transfer of the securities received.

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On March 22, 2018 Slovenia deposited its instrument of ratification. Earlier the Republic of Austria, the Isle of Man, Jersey and Poland already deposited their instruments of ratification. Therefore Slovenia is the fifth jurisdiction to deposit its instrument of ratification. Based on Article 34 of the MLI, the MLI will therefore enter into force on July 1, 2018.

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On March 22, 2018 on the website of the Court of Justice of the European Union (CJEU) the opinion of Advocate General Wahl in the Case C-648/16, Fortunata Silvia Fontana versus Agenzia delle Entrate - Direzione provinciale di Reggio Calabria (ECLI:EU:C:2018:213) was published.

From introductory remarks made by the Advocate General

Do the provisions of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax and the principles governing the VAT system preclude national legislation that allows the authorities to assess the tax due by a taxpayer presumed to have underdeclared VAT through an inductive method based on sectoral studies which estimate the likely revenues of certain categories of taxpayer?

 

That is, in a nutshell, the question raised by the present proceedings referred by the Commissione tributaria provinciale di Reggio Calabria (Reggio Calabria Provincial Tax Court, Italy).

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On March 21, 2018 on the website of the Court of Justice of the European Union (CJEU) the opinion of Advocate General Saugmandsgaard Øe in the Case C-5/17, Commissioners for Her Majesty’s Revenue and Customs versus DPAS Limited (ECLI:EU:C:2018:205) was published.

From introductory remarks made by the Advocate General

By decision of 28 November 2016, which was received at the Court on 6 January 2017, the Upper Tribunal (Tax and Chancery Chamber) (United Kingdom) submitted to the Court a request for a preliminary ruling on the interpretation of Article 135(1)(d) of Directive 2006/112/EC (‘the VAT Directive’).

 

This request was made in the course of proceedings between DPAS Limited and Commissioners for Her Majesty’s Revenue and Customs (‘the tax authority’) concerning the refusal by the tax authority to exempt from value added tax (VAT) a supply of services made by DPAS.

 

DPAS provides practice-branded dental plans to dentists and supplies dental plan administration services to patients who subscribe to those plans. The question raised in the national proceedings is, in essence, whether the services provided to those patients constitute ‘transactions concerning payments or transfers’ which are exempt under Article 135(1)(d) of the VAT Directive.

 

I will propose that the Court answer that question in the negative since a supply of services such as that at issue in the dispute in the main proceedings does not, in itself, result in the legal and financial changes which are characteristic of the transfer of a sum of money. In practice, that response means that such a supply must be subject to VAT.

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On March 21, 2018 the European Commission presented two legislative proposals for new taxation rules applying to digital business activities. The first initiative aims to reform corporate tax rules so that profits are registered and taxed where businesses have significant interaction with users through digital channels. This forms the Commission's preferred long-term solution and is laid down in a proposal for a COUNCIL DIRECTIVE laying down rules relating to the corporate taxation of a significant digital presence. According to the European Commission the  second proposal responds to calls from several Member States for an interim tax which covers the main digital activities that currently escape tax altogether in the EU. This second proposal is laid down in a proposal for a COUNCIL DIRECTIVE on the common system of a digital services tax on revenues resulting from the provision of certain digital services.

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On March 21, 2018 the Court of Justice of the European Union (CJEU) judged in Case C-533/16, Volkswagen AG versus Finančné riaditeľstvo Slovenskej republiky (ECLI:EU:C:2018:204).

This request for a preliminary ruling concerns the interpretation of Article 167 and of Article 178(a) 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 2008/8/EC of 12 February 2008 (OJ 2008 L 44, p. 11) (‘Directive 2006/112’), of 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 (OJ 2008 L 44, p. 23), and Article 41 of the Charter of Fundamental Rights of the European Union (‘the Charter’) and of the principles of fiscal neutrality and proportionality.

 

The request has been made in proceedings between Volkswagen AG and the Finančné riaditeľstvo Slovenskej republiky (Finance Directorate of the Slovak Republic) concerning the partial refusal by that authority of an application for a refund of value added tax (‘VAT’) due to the expiry of the limitation period.

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