Judgment of the Court of Justice of 25/11/2021 (Amper Metal Kft), case C-334/20
A paper manufacturer sponsors a motor race in Hungary. The sponsorship consists of the affixing of stickers, bearing the company’s name, on cars. It deducts VAT on these advertising services in its VAT return.
The tax authorities do not see it that way and reject the deduction. The reason given is clear and precise: the commercial decisions of a paper manufacturer’s customers are not likely to be influenced by stickers on racing cars. The expense is therefore neither reasonable (it was paid too much) nor economically viable.
The lack of economic rationality is an obstacle to the exercise of the right of deduction of VAT.
Source vatdesk.eu
