News

06.10.2022

Tax & Financial Standards New Judgments of the ECJ For September 2022

Tax & Financial Standards New Judgments of the ECJ For September 2022

Tax&Financial Standards (T&FSt) – International Financial Reporting Standards, Date or entry into force: 1.01.2022 (consolidated version), in 4 languages - Bulgarian, English, German and French

New judgments

Joined Cases С-80/21 - C-82/21 of 8 September 2022

Unfair terms in consumer contracts – Mortgage credit agreements – Effects of a finding that a term is unfair – Period of limitation – Principle of effectiveness

Key aspects of the decision in the economic range:

National case-law according to which the national court may, after finding that an unfair term contained in a contract concluded between a consumer and a seller or supplier which does not result in the invalidity of that contract in its entirety, is void, replace a supplementary provision. National case-law according to which the national court may, after finding that an unfair term contained in a contract concluded between a consumer and a seller or supplier is invalid and that the contract as a whole is void, replace the annulled term either with an interpretation of the wishes of the parties in order to avoid the annulment of the contract, or with a supplementary provision of national law.

Proceedings concerning a request by consumers, seeking the annulment of the credit agreements concluded with banks, on the ground that those contracts contain unfair terms.

С-98/21 of 8 September 2022

Value added tax deductions — Inclusion of a holding company in the transactions of subsidiaries — Expenses related to partner's non-monetary contribution made to subsidiaries — Subsidiary activities which are mostly tax exempt — Concepts of "economic activity", "taxable person" and "interference of a holding company in the management of its subsidiary"

Key aspects of the decision in the economic range:

A holding company, which carries out subsequent taxable transactions for subsidiaries, is not entitled to deduct the VAT paid on supplies, that it receives from third parties and transfers to the subsidiaries against the provision of participation in the general profit, when, first, the supplies received are not in direct and immediate connection with the holding company's own transactions, and secondly, those supplies are not included in the price of the taxable supplies provided to the subsidiaries, and third, those supplies are not part of the total costs.

Concepts of "economic activity", "taxable person" and "interference of a holding company in the management of its subsidiary".

Proceedings between tax office and W concerning the refusal to recognize the latter's right to deduct the value added tax paid on supplies received, which that company is enabled to make, as a partner's contribution to its subsidiaries, and for their part they mostly carry out VAT-exempt supplies.

С-368/21 of 8 September 2022

Place where the customs debt is incurred — Chargeable event and place where the import VAT becomes chargeable — Place where the tax liability is incurred — Finding of a failure to comply with an obligation imposed by EU customs legislation — Determination of the place of importation of goods — Means of transport registered in a third country and imported into the European Union in infringement of customs legislation

Key aspects of the decision in the economic range:

Customs union. Value added tax. Place of importation of a vehicle registered in a third country and imported into the European Union in infringement of customs legislation, situated in the Member State in which the person who failed to comply with customs obligations resides and actually uses the vehicle. A vehicle, entered into the economic network of the European Union.

Proceedings concerning the levying of import value added tax on a vehicle imported into the territory of the European Union in breach of customs legislation.

С-18/21 of 15 September 2022

European order for payment procedure – 30-day time limit for lodging a statement of opposition to the European order for payment - Review procedure - COVID‑19 pandemic – National legislation which interrupted the procedural periods in civil matters for several weeks

Key aspects of the decision in the economic range:

Judicial cooperation in civil matters. National legislation on measures related to COVID-19 interrupting all procedural periods in civil cases. Regulation No. 1896/2006 allows for the 30-day deadline for the debtor to file an objection against a European payment order to apply national legislation that was adopted at the onset of the COVID-19 pandemic.

Proceedings between an Austrian insurance company, and a German national, concerning the enforcement of a European order for payment served on him.

С-227/21 of 15 September 2022

Right to deduct input VAT — Sale of an item of immovable property between taxable persons — Vendor subject to insolvency proceedings — National practice under which the purchaser is denied the right of deduction on the ground that he or she knew or should have known of the vendor’s difficulties in paying the output tax — Fraud and abuse of rights — Concept of „fraud affecting the European Communities“

Key aspects of the decision in the economic range:

Right to deduct input VAT. Scope of the case-law on fraud. Existence of an abuse of right. Refusal of the right to deduct input VAT because the recipient of the supply knew or should have known that the supplier would not be able to pay the VAT incurred to the tax authorities due to his or her financial situation. VAT burden where the price is set off against existing debts.

Concept of „fraud affecting the European Communities“.

Proceedings, concerning denial of the right to deduct value added tax (VAT) on account of an alleged abuse of rights.

С-669/20 of 15 September 2022

Coordination of procedures for the award of certain works contracts, supply contracts and service contracts – Obligation to verify whether an abnormally low tender exists – Criterion laid down by a piece of national legislation for assessing the abnormally low nature of a tender – Requirement that there be at least three tenders – Judicial review

Key aspects of the decision in the economic range:

Procedures for the award of certain works contracts, supply contracts and service contracts. Setting of a criterion for assessing an abnormally low tender. Existence of at least three tenders. Where there is suspicion that a tender is of an abnormally low nature, is required to verify whether this is actually the case by taking account of all the relevant components of the invitation to tender and the contract documents, without the impossibility of applying the criteria laid down for that purpose by a piece of national legislation or the number of tenders submitted being relevant in that regard.

Proceedings concerning a decision ranking tenderers and selecting the successful tenderer in respect of a public contract.

С-330/21 of 22 September 2022

Value added tax (VAT)— Option for the Member States to apply a reduced rate of VAT to certain supplies of goods and services — Fitness centres — Individual or group coaching — Concepts of „use of sporting facilities“ and „single supply“

Key aspects of the decision in the economic range:

A supply of services consisting of permission to use sporting facilities in a fitness centre and the supply of individual or group coaching may be subject to a reduced rate of VAT where that coaching is linked to the use of those facilities and is necessary for the practice of sports or where that coaching is ancillary.

Concepts of „use of sporting facilities“ and „single supply“.

Proceedings between E, the operator of a fitness centre, and the Belgian State concerning the application of the reduced rate of value added tax to the activities of that company.

С-335/21 of 22 September 2022

Unfair terms in consumer contracts – Summary procedure for the recovery of lawyers’ fees – Potentially unfair terms contained in a fee agreement – National law not providing for the possibility of review by a court – Misleading commercial practice – Contract concluded between lawyer and client prohibiting the client from withdrawing, without the knowledge or against the advice of the lawyer, on pain of a financial penalty - Concept of ‘main subject matter of the contract’

Key aspects of the decision in the economic range:

National law relating to a summary procedure for the recovery of lawyers’ fees pursuant to which the claim brought against the consumer client is the object of a decision delivered by a non-judicial authority, the intervention of a court being provided for only at the stage of a possible objection being raised against that decision. Term of a contract concluded between a lawyer and his or her client pursuant to which the client undertakes to follow the instructions of that lawyer, not to act without the knowledge or against the advice of that lawyer and not to withdraw himself or herself from the legal proceedings the conduct of which he or she had entrusted to that lawyer, on pain of a financial penalty.

Proceedings between a lawyer, and D, his client, following a failure to pay fees claimed in respect of legal services provided to the latter.

С-538/20 of 22 September 2022

Freedom of establishment — Avoidance of double taxation by exemption of the income of the non-resident permanent establishment — Deduction of final losses incurred by a non-resident permanent establishment — State which has waived its power to impose taxes under a double taxation convention — Comparability of situations

Key aspects of the decision in the economic range:

Corporation tax. A tax system of a Member State under which a company resident in that Member State may not deduct from its taxable profits the final losses incurred by its permanent establishment situated in another Member State where the Member State of residence has waived its power to tax the profits of that permanent establishment under a double taxation convention.

Proceedings between Tax Office B and W a public limited company established in Germany, concerning the refusal of Tax Office B to take into account, for the calculation of the tax payable by that company in that Member State the losses incurred by that company’s permanent establishment that was situated in the United Kingdom and closed.