The opinion of the AG in Case C-71/18, KPC Herning (VAT – Supply of land with building(s))
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On March 19, 2019 on the website of the Court of Justice of the European Union (CJEU) the opinion of Advocate General Bobek in the Case C-71/18, Skatteministeriet versus KPC Herning (ECLI:EU:C:2019:226) was published.
Does the transfer of land on which there is an existing building, where the parties clearly intend at the moment of transfer that the purchaser or a subsequent purchaser of the land will demolish that building in order to construct a new building, constitute a transaction which is exempt from value added tax (VAT), in conformity with Articles 12 and 135(1)(j) and (k) of the VAT Directive?
That is, in a nutshell, the question referred to this Court by the Vestre Landsret (High Court of Western Denmark, Denmark). The broader issue of principle raised by this case is the role of parties’ intent in classifying a transaction for the purposes of the VAT Directive.
CJEU judges in Case C-449/17, A & G Fahrschul-Akademie (VAT — Exemption for certain activities in the public interest – Driving school tuition provided by a driving school)
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On March 13, 2019 the Court of Justice of the European Union (CJEU) judged in Case C-449/17, A & G Fahrschul-Akademie GmbH versus Finanzamt Wolfenbüttel (ECLI:EU:C:2019:202).
This request for a preliminary ruling concerns the interpretation of Article 132(1)(i) and (j) 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 request has been made in proceedings between A & G Fahrschul-Akademie GmbH (‘A & G’) and Finanzamt Wolfenbüttel (tax office, Wolfenbüttel, Germany; ‘the tax office’) concerning the refusal by the tax office to exempt from value added tax (VAT) services relating to motor vehicle driving tuition provided by A & G for the purpose of acquiring driving licences for vehicles in categories B and C1 referred to in Article 4(4) of Directive 2006/126/EC of the European Parliament and of the Council of 20 December 2006 on driving licences (OJ 2006 L 403, p. 18).
CJEU judges in Case C-647/17, Srf konsulterna (VAT — Supply of services in respect of admission to educational events – Place of taxable transactions)
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On March 13, 2019 the Court of Justice of the European Union (CJEU) judged in Case C-647/17, Skatteverket versus Srf konsulterna AB (ECLI:EU:C:2019:195).
This request for a preliminary ruling concerns the interpretation of Article 53 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) (‘the VAT Directive’).
The request has been made in proceedings between the Skatteverket (local Swedish tax authorities) and Srf konsulterna AB (‘Srf’) concerning a tax ruling by the Skatterättsnämnden (Revenue Law Commission, Sweden) relating to the collection, in Sweden, of value added tax (VAT) on the provision of accounting and management courses lasting five days in another Member State from taxable persons who have established their business or have a fixed establishment in Sweden.
ECOFIN – VAT on e-commerce
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During its meeting of March 12, 2019 the Economic and Financial Affairs (ECOFIN) Council came to a political agreement regarding implementing rules on the VAT regime for e-commerce which was adopted in December 2017. The aim of these proposals ("VAT e-commerce package") is to lay down detailed rules needed to ensure the functioning of the new VAT rules for e-commerce following the amendments introduced by Council Directive (EU) 2017/2455 ("the VAT e-commerce Directive"), which will come into force in January 2021.
Digital Tax – ECOFIN did not come to an agreement yet
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According to a press release issued by the Economic and Financial Affairs (ECOFIN) Council with respect to its meeting of March 12, 2019, the Council took note of the progress achieved in the negotiations on the digital services tax, since the issue was last discussed at the ECOFIN meeting of December 4, 2018, on the basis of a new compromise text setting out a scope limited to digital advertising services.
Read more: Digital Tax – ECOFIN did not come to an agreement yet
The EU puts 10 jurisdictions (back) on its list of non-cooperative jurisdictions for tax purposes
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During its meeting of March 12, 2019 the Economic and Financial Affairs (ECOFIN) Council adopted a revised EU list of non-cooperative jurisdictions for tax purposes. By doing so the ECOFIN put 10 jurisdictions (that it had earlier removed) back on the list. The reason here for is that those jurisdictions did not implement the commitments they had made to the EU by the agreed deadline.
Morocco joined the Inclusive Framework on BEPS
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On March 5, 2019 the OECD announced that Morocco joined the Inclusive Framework on BEPS. Therewith the total number of jurisdictions that have joined the Inclusive Framework on BEPS comes to 129.
ECOFIN to discus the EU list of non-cooperative jurisdictions and a digital services tax
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The next Economic and Financial Affairs (ECOFIN) Council will take place on March 12, 2019. Several tax topics are on the agenda for this meeting. The information provided below is based on the Agenda highlights as published on the website of the European Council and on the annotated agenda for these meetings that the Dutch Ministry of Finance has sent to the Dutch House of Representatives.
Read more: ECOFIN to discus the EU list of non-cooperative jurisdictions and a digital services tax
CJEU judges in Case C-135/17 X (Sociétés intermédiaires établies dans des pays tiers) (Free movement of capital — Movement of capital between Member States and third countries)
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On February 26, 2019 the Court of Justice of the European Union (CJEU) judged in Case C-135/17, X GmbH versus Finanzamt Stuttgart — Körperschaften (ECLI:EU:C:2019:136).
This request for a preliminary ruling concerns the interpretation of Articles 63 and 64 TFEU.
The request has been made in proceedings between X GmbH, a company incorporated under German law, and the Finanzamt Stuttgart — Körperschaften (Stuttgart Tax Office — Legal Persons Department, Germany) regarding the incorporation of the income obtained by Y, a company incorporated under Swiss law which is 30% owned by X, into the latter’s tax base.
CJEU judges in Case C-581/17, Wächtler (Agreement between the European Community and the Swiss Confederation on the free movement of persons – Freedom of movement of self-employed persons)
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On February 26, 2019 the Court of Justice of the European Union (CJEU) judged in Case C-581/17, Martin Wächtler versus Finanzamt Konstanz (ECLI:EU:C:2019:138).
This request for a preliminary ruling concerns the interpretation of the Agreement between the European Community and its Member States, of the one part, and the Swiss Confederation, of the other, on the free movement of persons, signed in Luxembourg on 21 June 1999 (OJ 2002 L 114, p. 6; ‘the AFMP’).
The request has been made in proceedings between Mr Martin Wächtler and the Finanzamt Konstanz (the tax authority of Konstanz, Germany) concerning the decision of that authority to tax, on his transferring his domicile from Germany to Switzerland, the unrealised capital gains with respect to shares held by him in a company established in Switzerland of which he is also the managing director.
CJEU judges in the joined cases C-116/16 and C-117/16 (Parent-subsidiary Directive – Need for a beneficial owner of dividend payments)
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On February 26, 2019 the Court of Justice of the European Union (CJEU) judged in the joined cases C-116/16 (Skatteministeriet versus T Danmark) and C-117/16 (Skatteministeriet versus Y Denmark Aps) (ECLI:EU:C:2019:135).
These requests for a preliminary ruling concern the interpretation of Council Directive 90/435/EEC of 23 July 1990 on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States (OJ 1990 L 225, p. 6), as amended by Council Directive 2003/123/EC of 22 December 2003 (OJ 2004 L 7, p. 41) (‘Directive 90/435’), and of Articles 49, 54 and 63 TFEU.
The requests have been made in proceedings brought by the Skatteministeriet (Ministry of Taxation, Denmark) against T Danmark and Y Denmark Aps relating to the obligation imposed on those companies to pay withholding tax by reason of the payment by them of dividends to non-resident companies regarded by the tax authority as not being the beneficial owners of those dividends and, accordingly, as incapable of being entitled to the exemption from withholding tax provided for by Directive 90/435.
CJEU judges in the joined cases C-115/16, C-118/16, C-119/16 and C-299/16 (The Interest and Royalty Directive – Beneficial ownership)
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On February 26, 2019 the Court of Justice of the European Union (CJEU) judged in the joined case C-115/16 (N Luxembourg 1 versus Skatteministeriet) C-118/16 (X Denmark A/S versus Skatteministeriet) C-119/16 (C Danmark I versus Skatteministeriet) and C-299/16 (Z Denmark ApS - Skatteministeriet) (ECLI:EU:C:2019:134).
These requests for a preliminary ruling concern the interpretation of Council Directive 2003/49/EC of 3 June 2003 on a common system of taxation applicable to interest and royalty payments made between associated companies of different Member States (OJ 2003 L 157, p. 49) and of Articles 49, 54 and 63 TFEU.
The requests have been made in proceedings brought by N Luxembourg 1, X Denmark A/S, C Danmark I and Z Denmark ApS against the Skatteministeriet (Ministry of Taxation, Denmark) relating to the obligation imposed on those companies to pay withholding tax by reason of the payment by them of interest to non-resident companies regarded by the tax authority as not being the beneficial owners of that interest and, accordingly, as incapable of being entitled to the exemption from any taxes that is provided for by Directive 2003/49.
Finland deposits its instrument of ratification for the MLI
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On February 25, 2019 the OECD announced that on the same date Finland deposited its instrument of ratification for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI).
Read more: Finland deposits its instrument of ratification for the MLI
Strike 1 - CJEU annuls the European Commission’s decision that the Belgian system relating to the excess profit of multinational companies constituted an aid scheme
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On February 14, 2019 the General Court judged in the joined cases T‑131/16 (Belgium v Commission) and T‑263/16 (Magnetrol International v Commission) (ECLI:EU:T:2019:91). The General Court judged that the European Commission wrongly considered that the Belgian system relating to the excess profit constituted an aid scheme.
CJEU judges in Case C-562/17, Nestrade (VAT – VAT refund sought by an undertaking not established in the EU)
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On February 14, 2019 the Court of Justice of the European Union (CJEU) judged in Case C-562/17 Nestrade SA versus Agencia Estatal de la Administración Tributaria (AEAT), Tribunal Económico-Administrativo Central (ECLI:EU:C:2019:115).
This reference for a preliminary ruling concerns the interpretation of provisions of the Thirteenth Council Directive 86/560/EEC of 17 November 1986 on the harmonisation of the laws of the Member States relating to turnover taxes — Arrangements for the refund of value added tax to taxable persons not established in Community territory (OJ 1986, L 326, p. 40) (‘the Thirteenth Directive’).
The request has been made in proceedings between Nestrade SA, a commercial company established in Switzerland, and the Agencia Estatal de la Administración Tributaria (AEAT) (State Tax Administration Agency, Spain) and the Tribunal Económico-Administrativo Central (Central Tax Tribunal, Spain) concerning the partial refusal to refund value added tax (VAT) owing to a final decision prior to that refusal.
CJEU judges in Case C-531/17, Vetsch Int. Transporte (VAT – Intra-community transfer – Acquirer committing tax evasion with a subsequent taxable transaction)
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On February 14, 2019 the Court of Justice of the European Union (CJEU) judged in Case C-531/17 Vetsch Int. Transporte GmbH intervener: Zollamt Feldkirch Wolfurt (ECLI:EU:C:2019:114).
This request for a preliminary ruling concerns the interpretation of Article 143(d) 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 Article 143(1)(d) of that directive, as amended by Council Directive 2009/69/EC of 25 June 2009 (OJ 2009 L 175, p. 12) (‘the amended VAT Directive’).
The request has been made in proceedings between Vetsch Int. Transporte GmbH (‘Vetsch’) and the Zollamt Feldkirch Wolfurt (Customs Office, Feldkirch Wolfurt, Austria; ‘the Customs Office’) concerning the exemption from value added tax (VAT) of imports of goods from Switzerland into Austria for onward transfer to Bulgaria.
Guernsey deposits its instrument of ratification for the MLI
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On February 12, 2019 the OECD announced that on the same date Guernsey deposited its instrument of ratification for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI).
Read more: Guernsey deposits its instrument of ratification for the MLI
Mauritania signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters
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On February 12, 2019 the OECD issued a press release announcing that on that same date Mauritania signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. By doing so, Mauritania became the 127th signatory to the convention.
