May 2

 

CJEU expected to deliver judgment in Case C-574/15, Scialdone (VAT – Retroactive application of the more lenient criminal penalty?)

 

Questions referred for a preliminary ruling:

1. May EU law, and more particularly Article 4(3) TEU, in conjunction with Article 325 TFEU and Directive 2006/112/EC, which lay down for the Member States the duty of equal treatment so far as concerns policies relating to penalties, be interpreted as precluding the enactment of a provision of national law providing that the penal consequences of failure to pay VAT follow once a financial threshold is crossed greater than the threshold provided for in the case of failure to pay income tax?

2. May EU law, and more particularly Article 4(3) TEU in conjunction with Article 325 TFEU and Directive 2006/112, which oblige the Member States to provide effective, dissuasive and proportionate penalties to protect the financial interests of the European Union, be interpreted as precluding the enactment of a national provision which exempts the defendant (whether a director, legal representative, person to whom responsibility for fiscal matters has been delegated or an accessory to the offence) from liability to punishment, if the entity with legal personality concerned has made late payment both of the tax itself and of the administrative penalties owed in connection with VAT, even though the tax assessment has already been made, criminal proceedings and indictment initiated, and the establishment of inter partes proceedings duly confirmed, but before trial proceedings have been declared opened, in a system that does not impose on that director, legal representative, or delegate and accessory to the offence any other penalty, not even an administrative penalty?

3. Must the concept of fraud governed by Article 1 of the PIF Convention be interpreted as encompassing cases of failure to pay or of partial or late payment of VAT and, consequently, does Article 2 of that convention require the Member State to punish with a term of imprisonment failure to pay or partial or late payment of VAT in relation to sums in excess of EUR 50 000?

If the answer is in the negative, it will be necessary to determine whether the rule under Article 325 TFEU, which requires the Member States to provide penalties, including criminal penalties, which are dissuasive, proportionate and effective, must be interpreted as precluding national legislation which exempts from criminal and administrative liability the directors and legal representatives of legal persons, or the persons to whom the functions of those legal persons are delegated and persons who are accessories to the offence, for failure to pay or partial or late payment of VAT in relation to sums equivalent to three or five times the minimum threshold laid down in case of fraud, that is to say, EUR 50 000.

 

 

The opinion in this case as delivered on July 13, 2017 by Advocate General Bobek can be found here

 

 

 

 

 

 

May 3

 

Opinion of the Advocate General expected to be delivered in Case C-16/17, TGE Gas Engineering (VAT – Right to deduction of VAT by a branch of a foreign company)

 

Questions referred for a preliminary ruling:

Must Articles 44, 45, 132(1)(f), 167, 168, 169, 178, 179 and 192a, 193, 194 and 196 of Directive 2006/112 (the VAT Directive), Articles 10 and 11 of Implementing Regulation (EU) No 282/2011 2 and the principle of neutrality be interpreted as meaning that they preclude the Portuguese tax authorities from refusing the right to deduction of VAT by a branch of a German company, in circumstances where:

  the German company obtained a tax identification number in Portugal to carry out an isolated act, namely ‘acquisition of shares’, corresponding to a non-resident entity without a permanent establishment;

  subsequently, the branch of that German company was registered in Portugal and was assigned its own tax number, as a permanent establishment of that company;

  later, the German company, using the first identification number, entered into a contract with another company to establish an economic interest group (ACE) to carry out a works contract in Portugal;

  subsequently, the branch, using its own tax number, entered into a subcontract with the ACE, setting out the reciprocal services between the branch and the ACE and agreeing that the latter would invoice the subcontractors, in the agreed proportions, for the costs which it incurred;

  the ACE indicated the branch’s tax identification number in the debit notes it issued to invoice costs to that branch, and charged VAT;

  the branch deducted the VAT charged in the debit notes;

  the transactions of the ACE (by way of subcontracting) consist of the transactions of the branch and of the other company forming part of the ACE, these latter having invoiced to the ACE the entire revenue that the ACE invoiced to the developer?

 

 

 

 

 

 

May 3

 

Opinion of the Advocate General expected to be delivered in Case C-153/17, Volkswagen (VAT – Right to deduct input VAT on general overhead costs – Interpretation of Case C-93/98, Midland Bank)

 

Questions referred for a preliminary ruling:

Where general overhead costs attributed to hire purchase transactions (which consist of exempt supplies of finance and taxable supplies of cars), have been incorporated only into the price of the taxable person’s exempt supplies of finance, does the taxable person have a right to deduct any of the input tax on those costs?

What is the proper interpretation of paragraph 31 of Case C-93/98, Midland Bank, and specifically the statement that overhead costs “are part of the taxable person’s general costs and are, as such, components of the price of an undertaking’s products”?

In particular:

Should this passage be interpreted to mean that a Member State must always attribute some input tax to every supply in any special method adopted under Article 173(2)(c) of Directive 2006/112/EC of 28 November 2006 on the common system of value added tax?

Is this the case even if the factual circumstances are that the overhead costs are not incorporated in the price of taxable supplies made by the undertaking?

Does the fact that the overhead costs have been actually used, at least to some extent, in making taxable supplies of cars,

entail that some proportion of the input tax on those costs must be deductible?

Is this the case even if the factual circumstances are that overhead costs are not incorporated in the price of the taxable supplies of cars?

Can it be legitimate in principle to ignore the taxable supplies of cars (or their value) for the purposes of arriving at a special method under Article 173(2)(c) of the Directive?

 

 

 

 

 

 

May 3

 

Opinion of the Advocate General expected to be delivered in Case C-249/17, Ryanair (VAT – Input VAT in case of a potential takeover)

 

Questions referred for a preliminary ruling:

1. Can a future intention to provide management services to a takeover target, in the event that the takeover is successful, be sufficient to establish that the potential acquirer is engaged in economic activity for the purposes of Art. 4 of the Sixth VAT Directive (Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonization of the laws of the Member States relating to turnover taxes - Common system of value added tax: uniform basis of assessment) so that VAT charged to the potential acquirer on goods or services provided for the purposes of seeking to progress the relevant acquisition can potentially be considered as VAT on an input to the intended economic activity of providing such management services; and

2. Can there be a sufficient “direct and immediate link”, as identified as a requirement by the CJEU in Cibo (Judgment of 27 September 2001, Cibo Participations SA v Directeur régional des impôts du Nord-Pas-de-Calais, C-16/00, EU:C:2001:495), between professional services rendered in the context of such a potential takeover and output, being the potential provision of management to the acquisition target in the event that the takeover is successful, so as to permit a deduction to be made in respect of the VAT payable on those professional services?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The schedule above merely contains a selection of events/important dates taking place during the week and should in no way be considered to be complete. It is very well possible that other important events take place during the week that were not included in the schedule above. It is your own responsibility to research other sources to review whether other important events take place that are not included in the schedule above.

 

Furthermore the schedule above is solely based on the information provided as by the respective authorities when the schedule above was drafted. It is your own responsibility to check whether the information included in the schedule above is complete, accurate and correct. International Tax Plaza and/or its owners do not accept any liability if the information provided in the schedule above is incomplete, not accurate and/or incorrect.

 

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