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.
The opinion of the AG in Case C-566/17, Związek Gmin Zagłębia Miedziowego (VAT – Deduction of input tax – transactions falling within the scope of VAT and falling outside the scope of VAT)
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On December 6, 2018 on the website of the Court of Justice of the European Union (CJEU) the opinion of Advocate General Sharpston in the Case C-566/17, Związek Gmin Zagłębia Miedziowego w Polkowicach versus Szef Krajowej Administracji Skarbowej (ECLI:EU:C:2018:995) was published.
The present request for a preliminary ruling arises in the context of a dispute concerning the scope of the right to deduct input VAT incurred on goods and services used indissociably by taxable persons for the purposes of both their economic and non-economic activities.
Whilst it appears to follow from the scheme of Directive 2006/112 that that right can be claimed only in so far as the goods and services are used for the purpose of the former type of activity, that directive does not provide for methods or criteria for apportionment of input tax in such situations. The referring court seeks guidance on whether the fact that national law also lacks specific rules addressing that issue affects the extent to which a taxable person may exercise the right to deduct input VAT in relation to such goods and services. In particular, the question arises whether there is in EU law a general principle or a fundamental right that would preclude the national court in such circumstances from applying those limitations on the right to deduct in the case in the main proceedings.
CJEU judges in Case C-672/17, Tratave (VAT – Adjustment of the tax in the event of non-payment)
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On December 6, 2018 the Court of Justice of the European Union (CJEU) judged in Case C-672/17, Tratave — Tratamento de Águas Residuais do Ave SA versus Autoridade Tributária e Aduaneira (ECLI:EU:C:2018:989).
This request for a preliminary ruling concerns the interpretation of the principle of fiscal neutrality and of Article 90 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 brought by Tratave — Tratamento de Águas Residuais do Ave SA (‘Tratave’) against the Autoridade Tributária e Aduaneira (Tax and Customs Authority, Portugal) regarding the latter’s refusal to allow it to adjust the amount of value added tax (VAT) paid in relation to unpaid debts considered to be unrecoverable due to the insolvency of the debtors.
Qatar signs the MLI
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On December 4, 2018 the OECD issued a press release announcing that on the same date Qatar signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI). Therewith Qatar becomes the 85th jurisdiction to join the Convention.
VAT – ECOFIN adopts 3 short legislative acts containing short-term fixes to current EU system
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During its meeting of December 4, 2018 the Economic and Financial Affairs (ECOFIN) Council adopted three short legislative acts aimed at adjusting some of the EU's VAT rules in order to fix four specific issues pending the introduction of a new VAT system.
CJEU judges in Case C-548/17, baumgarten sports & more (VAT – Taxation of professional football player agencies)
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On November 29, 2018 the Court of Justice of the European Union (CJEU) judged in Case C-548/17, Finanzamt Goslar versus baumgarten sports & more GmbH (ECLI:EU:C:2018:970).
This request for a preliminary ruling concerns the interpretation of Articles 63 and 90 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 Finanzamt Goslar (Tax Office, Goslar, Germany) and baumgarten sports & more GmbH (‘the company’) concerning the value added tax (VAT) taxation of payments by instalments.
CJEU judges in Case C-264/17, Mensing (VAT – Special arrangements for works of art)
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On November 29, 2018 the Court of Justice of the European Union (CJEU) judged in Case C-264/17, Harry Mensing versus Finanzamt Hamm (ECLI:EU:C:2018:968).
This request for a preliminary ruling concerns the interpretation of Article 316(1)(b) and Article 322(b) 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 Mr Harry Mensing, an art dealer, and Finanzamt Hamm (Tax Office in Hamm, Germany) concerning the refusal of the Tax Office to grant the benefit of the margin scheme to supplies of works of art acquired by Mr Mensing in other Member States.
Read more: CJEU judges in Case C-264/17, Mensing (VAT – Special arrangements for works of art)
CJEU judges in Case C-575/17, Sofina and Others (Freedom of establishment — Dividend withholding tax)
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On November 22, 2018 the Court of Justice of the European Union (CJEU) judged in Case C-575/17, Sofina SA, Rebelco SA, Sidro SA versus Ministre de l’Action et des Comptes publics (ECLI:EU:C:2018:943).
This request for a preliminary ruling concerns the interpretation of Articles 63 and 65 TFEU.
The request was made in the context of a dispute between, on the one hand, Sofina SA, Rebelco SA and Sidro SA, companies incorporated under Belgian law, and, on the other, the Ministre de l’Action et des Comptes publics (Minister for the Public Sector and Public Accounts, France) regarding the latter’s refusal to reimburse the withholding tax levied on the dividends paid to those companies between 2008 and 2011.
CJEU judges in Case C-664/16, Vădan (VAT – Deduction of input tax – Need to provide evidence by way of invoices)
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On November 21, 2018 the Court of Justice of the European Union (CJEU) judged in Case C-664/16, Lucreţiu Hadrian Vădan versus Agenția Națională de Administrare Fiscală — Direcția Generală de Soluționare a Contestațiilor, Direcţia Generală Regională a Finanţelor Publice Braşov — Administraţia Judeţeană a Finanţelor Publice Alba (ECLI:EU:C:2018:933).
This request for a preliminary ruling concerns the interpretation 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’), in particular Articles 167, 168, 178 and 273, and the principles of neutrality of value added tax (‘VAT’) and proportionality.
The request has been made in proceedings between (i) Mr Lucrețiu Hadrian Vădan and (ii) the Agenția Națională de Administrare Fiscală — Direcția Generală de Soluționare a Contestațiilor (National Tax Administration Office — Directorate-General for the settlement of complaints, Romania) and the Direcția Generală Regională a Finanțelor Publice Brașov — Administrația Județeană a Finanțelor Publice Alba (the Regional Directorate-General of Public Finances of Brașov — Alba Public Finance Administration, Romania) regarding the refusal to grant the appellant in the main proceedings the right to deduct VAT in respect of the goods and services which he used for his own transactions because he was unable to produce the invoices relating to those goods and services.
CJEU judges in Case C-648/16, Fontana (VAT – The application of VAT to the overall turnover established by extrapolation)
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On November 21, 2018 the Court of Justice of the European Union (CJEU) judged in Case C-648/16, Fortunata Silvia Fontana versus Agenzia delle Entrate — Direzione provinciale di Reggio Calabria (ECLI:EU:C:2018:932).
This request for a preliminary ruling concerns the interpretation of Article 273 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 Ms Fortunata Silvia Fontana and the Agenzia delle Entrate — Direzione provinciale di Reggio Calabria (Tax authorities — Provincial Directorate, Reggio Calabria, Italy; ‘the tax authorities’) regarding a tax assessment notice concerning an additional assessment to value added tax (VAT).
Cabo Verde has joined the Inclusive Framework on BEPS
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On November 19, 2018 the OECD announced that Cabo Verde joined the Inclusive Framework on BEPS. Therewith the total number of jurisdictions that have joined the Inclusive Framework on BEPS comes to 124.
Read more: Cabo Verde has joined the Inclusive Framework on BEPS
The OECD invites taxpayers to provide input for the seventh batch of Mutual Agreement Procedure peer reviews
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On October 20, 2016 the OECD launched the global review of Mutual Agreement Procedures (MAP) programmes by releasing key documents, approved by the Inclusive Framework on BEPS, that will form the basis of the Mutual Agreement Procedure peer review and monitoring process under Action 14 of the BEPS Action Plan. (For further information we refer to our article of October 20, 2016).
MLI - The OECD releases guidance on Synthesised texts for providing clarity on the impact of the MLI
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On November 14, 2018 the OECD released new Guidance for the development of synthesised texts (Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the MLI)). On the same date also a Secretariat note was released. This Secretariat note clarifies the entry into effect rules for tax treaties of jurisdictions that deposited their ratification instruments in September 2018.
The Dutch Minister of Finance’s summary of discussions held during the ECOFIN meeting of November 6, 2018
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On November 12, 2018 the Dutch Ministry of Finance sent a summary of discussions of the EUROGROUP meeting of November 5, 2018 and the Economic and Financial Affairs (ECOFIN) Council of November 6, 2018 to the Dutch House of Representatives. These summary of discussions give an interesting insight in the discussions that were held regarding digital taxation.
The UK Government opened a public consultation on the Digital Service Tax it intends to introduce in 2020
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On November 7, 2018 the UK Government opened a public consultation on the Digital Service Tax (DST) it intends to introduce in April 2020. This DST is designed as an interim response, pending global reform, to the challenges that digital businesses create for the international corporate tax system, as set out in the UK Government’s previous position papers. The UK Government is consulting on the detailed design and implementation of that tax ahead of its inclusion in the 2019-20 Finance Bill.
CJEU judges in Case C-502/17, C&D Foods Acquisition (VAT – Holding company – Deduction of input tax – Expenditure on services linked to the proposed sale of shares in a subsidiary)
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On November 8, 2018 the Court of Justice of the European Union (CJEU) judged in Case C-502/17, C&D Foods Acquisition ApS versus Skatteministeriet (ECLI:EU:C:2018:888).
This request for a preliminary ruling concerns the interpretation 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 the context of proceedings between C&D Foods Acquisition ApS (‘C&D Foods’) and the Skatteministeriet (Ministry of Taxation, Denmark) concerning the latter’s refusal to grant to that company the deduction of input value added tax (VAT) relating to consultancy services which that company used in the context of a proposed sale, which was not completed, of shares in a sub-subsidiary to which C&D Foods provided management and IT services.
ECOFIN discussed digital taxation
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During its meeting of November 6, 2018 the Economic and Financial Affairs Council (ECOFIN) held a policy debate on the European Commission’s proposal to establish a digital services tax. The discussion focused on two key issues in the Commission’s proposal:
· The scope of taxable services; and
· The question of the expiry of the directive (the so-called "sunset clause”).
ECOFIN adopts a directive allowing alignment of VAT rules for electronic and physical publications
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During its meeting of November 6, 2018 the Economic and Financial Affairs Council (ECOFIN) adopted a COUNCIL DIRECTIVE amending Directive 2006/112/EC as regards rates of value added tax applied to books, newspapers and periodicals. The adopted directive allows alignment of VAT rules for electronic and physical publications. From now on, member states will be able to apply reduced, super-reduced or zero VAT rates also to electronic publications.
