The ECJ issued its decision in 9 cases related to the VAT Exemption.
ECJ Cases decided in 2021 on ”Exemptions”
- Art. 135 para. 1 letter g of Council Directive 2006/112 / EC of November 28, 2006 on the common VAT system is to be interpreted as meaning that services provided by third parties to investment fund management companies, such as tax work that involves the taxation of fund income of the Shareholders must ensure in accordance with national law, and the granting of a right to use software that is used exclusively for performing calculations essential for risk management and performance measurement is subject to the tax exemption provided for in this provision if they have a close connection with the management of investment funds and are provided exclusively for the purpose of managing special assets, even if they are not fully outsourced.
- Art. 135 para. 1 letter g of Council Directive 2006/112 / EC of November 28, 2006 on the common VAT system is to be interpreted as meaning that services provided by third parties to investment fund management companies, such as tax work that involves the taxation of fund income of the Shareholders must ensure in accordance with national law, and the granting of a right to use software that is used exclusively for performing calculations essential for risk management and performance measurement is subject to the tax exemption provided for in this provision if they have a close connection with the management of investment funds and are provided exclusively for the purpose of managing special assets, even if they are not fully outsourced.
C-7/20 (Balgarska natsionalna televizia)
- 1) Article 2 (1) (c) of Council Directive 2006/112 / EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that the activity of a national public service broadcaster in providing audio-visual media services for viewers, which is financed by the state in the form of a subsidy and for which viewers do not pay fees for television broadcasting, does not constitute a supply of services for remuneration within the meaning of this provision.
(2) Article 168 of Directive 2006/112 must be interpreted as meaning that a national public service broadcaster may deduct value added tax (VAT) paid on supplies received in respect of purchases of goods and services used for the purposes of its activities, which give the right to deduct, and that he cannot deduct VAT paid on supplies received for the purchase of goods and services used for the purposes of his activities which do not fall within the scope of VAT. Member States should determine the methods and criteria for allocating the amount of VAT paid on supplies received between taxable transactions and transactions not falling within the scope of VAT, taking into account the purpose and structure of this Directive, respecting the principle of proportionality.
- Art. 135 (1) (a) of Council Directive 2006/112 / EC of November 28, 2006 on the common system of value added tax is to be interpreted as meaning that the exemption from value added tax provided for in the provision of services provided by a taxable person an insurance product to an insurance company and, as an ancillary service, the brokerage of this product for the account of this company and the administration of the insurance contracts concluded does not apply, provided that the referring court classifies these services as a single service with regard to VAT.
C-837/19 (Administration de l’Enregistrement, des Domaines and de la TVA)
- Article 9(1) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that the supply of services for the benefit of adults lacking legal capacity and intended to protect them in civil matters, the performance of which is entrusted to the person supplying services by a judicial authority in pursuance of the law and remuneration for which is fixed by the same authority as a fixed amount or is based on a case-by-case assessment by taking into account in particular the financial situation of the person lacking legal capacity – and such remuneration may moreover be borne by the State in the event that that person is indigent – where that supply is for consideration, the person supplying services obtains income therefrom on a continuing basis and the overall amount of the compensation for that activity is determined on the basis of criteria intended to ensure that the operating costs incurred by the person supplying services are covered, constitutes an economic activity within the meaning of that provision.
- Article 132(1)(g) of Directive 2006/112 must be interpreted as meaning, first, that the supply of services for the benefit of adults lacking legal capacity and intended to protect them in civil matters constitutes a ‘supply of services closely linked to welfare and social security work’, and, secondly, that it is not excluded that a lawyer supplying such services of a social nature may benefit, for the purposes of the business he or she operates and within the limits of those supplies, from recognition as a body devoted to social wellbeing, and such recognition must however necessarily be granted by a judicial authority only if the Member State concerned, by refusing that recognition, exceeded the limits of the discretion which it enjoys in that regard.
- The principle of the protection of legitimate expectations does not preclude the tax authority from imposing value added tax (VAT) on certain transactions relating to a previous period, in a situation where that authority has, over a number of years, accepted the taxable person’s VAT returns which do not include transactions of the same kind in its taxable transactions and where the taxable person is unable to recover the VAT due from those who have remunerated those transactions, with the remuneration already paid then deemed to include this VAT already.
- 1) The freedom of establishment enshrined in Article 49 TFEU must be interpreted as meaning that, in the case of deductions applied to the gross amount of a tax on deposits made by customers of credit institutions having their head office or agencies located in the territory of a region of a Member State,
– it opposes a deduction of 200,000 euros applied to the gross amount of this tax in favor of credit institutions whose head office is located in the territory of this region;
– it does not oppose deductions applied to the gross amount of said tax, of 5,000 euros per agency established in the territory of the said region, the latter amount being increased to 7,500 euros for any agency located in a municipality less than of 2 000 inhabitants, unless those deductions do in fact lead to discrimination based on the location of the head office of the credit institutions concerned which is not justified, which is for the referring court to verify.
Article 63 (1) TFEU must be interpreted as meaning that, in the case of a tax on deposits made by customers of credit institutions having their head office or branches located in the territory of a region of a Member State, it is opposed to deductions from the gross amount of that tax equal to credits, loans and investments intended for projects carried out in that region, provided that these deductions pursue an objective of a purely economic nature.
- 2) Article 401 of Council Directive 2006/112 / EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that it does not preclude legislation national instituting a tax due by credit institutions due to the holding of customer deposits, the tax base of which corresponds to the arithmetic average of the quarterly balance of these deposits and which cannot be passed on by the taxpayer to third parties.
- Article 174(2)(b) and (c) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, read in conjunction with Article 135(1) of that directive, must be interpreted as meaning that it does not apply to transactions involving intermediation in the sale of warranty extensions that are performed by a taxable person in the course of its main activity consisting in the sale to consumers of household electrical appliances and other computer and telecommunications equipment, with the consequence that the amount of turnover relating to those transactions must not be excluded from the denominator of the fraction used to calculate the deductible proportion referred to in Article 174(1) of that directive.
- Council Directive 2006/112 / EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that, subject to verification by the referring court, a monitoring service nutrition provided by a certified and authorized professional within sports establishments, and possibly within the framework of programs also including services of well-being and physical culture, constitutes a distinct and independent provision of services and is not likely to be come within the exemption provided for in Article 132 (1) (c) of that directive.
C-346/19 (Dubrovin & Tröger – Aquatics)
- The term “school and university teaching” within the meaning of Art. 132 Paragraph 1 Letters i and j of Council Directive 2006/112 / EC of November 28, 2006 on the common VAT system is to be interpreted as meaning that it does not include the Includes swimming lessons given by the swimming school.
See also historical overview of ECJ cases on VAT Exemptions (Art. 132-146)
Article 132
- Focus on ”Exemption for hospital & medical care” (Art. 132(1)(b))
- Focus on ”Exemption – Provision of medical care in the exercise of the medical and paramedical professions” (Art. 132(1)(c))
- Focus on ”Exemption – Supply of services by independent groups of persons” (Art. 132(1)(f))
- Focus on ”Exemption related to welfare and social security work” (Art. 132(1)(g))
Article 135
- Focus on ”Exemption – Insurance and reinsurance transactions, including related services performed by insurance brokers and insurance agents” (Art. 135(1)(a))
- Focus on ”Exemption – Financial transactions – Credits and transfer of Credits” (Art. 135(1)(b))
- Focus on ”Exemption – Financial transactions – deposit and current accounts, payments, transfers, debts, cheques and other negotiable instruments” (Art. 135(1)(d))
- Focus on ”Exemption – Management of special investment funds” (Art. 135(1)(g))
- Focus on ”Exemption – The supply of buildings and the land on which they stand; the supply of land” (Article 135(1)(j)-(k))
- Focus on ”Exemption – The ”leasing or letting of immovable property” (Art. 135(1)(l))
Other
- Focus on ”Exemption for Intra-Community supplies of goods” (Art. 138)
- Focus on ”Exemption on Importation” (Art. 143)
- Focus on ”Exemption – Exportation of Goods” (Art. 146)
Check also the previous articles on ”Looking back @2021”
- Brexit
- E-Commerce VAT Directive launched in the EU per July 1, 2021
- Next to the EU, 14 countries implemented VAT on E-Commerce, another 7 will implement in 2022
- Saudi-Arabia is the first country in the Middle East launching E-Invoicing, UAE may follow
- The concept of Fixed Establishments remains a major risk, and even why?
- Intrastat: Major updates applicable as of Jan 1, 2022
- Implementation/changes E-Invoicing & Real Time Reporting during 2021
- ECJ cases decided in 2021 on ”Taxable Amount”
- 49 ECJ VAT Cases decided (incl. orders) in 2021
- Split Payments
- Poland and France to introduce optional taxation of Financial Services – Exemption may not longer be applied
- Activities of the VAT Expert Group
