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31.10.2022

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

Tax & Financial Standards New Judgments of the ECJ For October 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

Value added tax — Exemptions — Granting of credit — Sub-participation agreement — Concept of “supply of services for consideration“

Key aspects of the decision in the economic range:

Taxation of the services for consideration. Services provided by a sub-participant under a sub-participation agreement, consisting of making available to the originator a financial contribution in exchange for payment of the proceeds from the receivables specified in that agreement, those receivables remaining in the assets of the originator.

Concept of “supply of services for consideration“.

Proceedings, concerning the classification, for the purposes of exemption from value added tax (VAT), of services provided under a sub-participation agreement.

Common transport policy — Suspension of the right to drive a motor vehicle — Driving licence issued by the Member State of normal residence in exchange for a driving licence issued by another Member State — Refusal by the first Member State to enforce a decision suspending the right to drive adopted by the second Member State

Key aspects of the decision in the economic range:

Member State of normal residence of the holder of a driving licence issued by that Member State, which doesn’t recognise and enforce in its territory a decision suspending that holder’s right to drive a motor vehicle adopted by another Member State on account of a road traffic offence committed in that Member State’s territory, including where that driving licence was issued in exchange for a driving licence previously issued by the Member State in which the road traffic offence was committed.

Proceedings concerning the enforcement, in Spain, of a decision suspending the right to drive taken in Bulgaria in respect of a person residing in Spain and holding a driving licence issued by the latter Member State in exchange for a driving licence issued by the former Member State.

Deductions of input VAT – Goods and services used by the taxable person to produce capital goods – Adjustment of deductions – Obligation to adjust deductions of VAT in the event of that taxable person being placed in liquidation and removed from the register of VAT payers

Key aspects of the decision in the economic range:

A taxable person is under an obligation to adjust deductions of input VAT relating to the acquisition of goods or services intended to produce capital goods in the case where, as a result of the decision of the owner or sole shareholder of that taxable person to place it in liquidation and of the taxable person’s request to be removed, and it being removed, from the register of VAT payers, the capital goods produced have not been used – and will never be used – in the course of taxable economic activities.

Proceedings concerning the obligation to adjust the deduction of value added tax on goods and services in respect of which the right of deduction had been exercised and which had been acquired for the purposes of producing capital goods which ultimately have not and will never be used for the intended taxable economic activity, as a result of the decision to place the taxable person in liquidation and of the taxable person being removed from the register of VAT payers.

Direct taxation — Freedom of establishment — Measures to prevent tax avoidance by shell companies — Determination of taxable income on the basis of presumed minimum income — Exclusion from the scope of those measures of companies and entities listed on national regulated markets

Key aspects of the decision in the economic range:

Corporate income tax. National legislation which restricts the ground for exclusion from the scope of the measures to prevent tax avoidance by shell companies to companies whose securities are traded on national regulated markets, excluding from the scope of that ground for exclusion other companies, whether national or foreign, whose securities are not traded on national regulated markets but which are controlled by companies and entities listed on foreign regulated markets.

Two sets of proceedings regarding the application of measures to prevent tax avoidance by shell companies.

Measures to ensure the correct collection of VAT — Obligation to counter illegal activities affecting the financial interests of the European Union — National legislation which provides for the joint and several liability of the non-taxable manager of the legal person — Transfers made in bad faith by the manager — Depletion of the legal person’s assets leading to insolvency — Failure to pay the amounts of VAT payable by the legal person within the prescribed time limits — Default interest — Proportionality

Key aspects of the decision in the economic range:

VAT debts of a taxable legal person. National legislation which provides for the joint and several liability of a company’s executive board where the latter, acting in bad faith, deprived the company of assets, with the result that it could not pay its tax debts (including VAT debts). Liability also for the interest payable by the company. Scope of EU law. Principle of proportionality. Joint and several liability of a natural person (who is not subject to value added tax (VAT) himself or herself) for tax debts and interest owed by another person.

Proceedings, concerning an adjustment notice by which MC was made jointly and severally liable for certain tax debts, including value added tax debts, of a commercial company of which he was the manager.

Common system of value added tax – VAT unduly invoiced and paid – Liquidation of the provider – Refusal by the tax authority to refund to the customer VAT improperly paid – Principles of effectiveness, tax neutrality and non-discrimination

Key aspects of the decision in the economic range:

Legislation of a Member State under which a taxable person to whom another taxable person has provided a service cannot claim, directly from the tax authority, a refund of the amount corresponding to the VAT in respect of which that service provider has unduly invoiced that taxable person and which that service provider has paid to the Treasury, where it is impossible to recover that amount from that service provider on account of that service provider having gone into liquidation.

Proceedings concerning the rejection of H’s application for a refund of the value added tax it had been charged in error in respect of a transaction which was not subject to VAT in Hungary and relating to property situated in another Member State.

Freedom of establishment and freedom to provide services — Corporation tax — Determination of the taxable income of companies — Transactions featuring foreign elements — Obligation to provide fiscal documentation of business relations between parties with a relationship of interdependence — Estimate of the taxable income and surcharge by way of a penalty

Key aspects of the decision in the economic range:

National legislation under which, in the first place, the taxpayer is subject to an obligation to provide documentation on the nature and content of, as well as on the economic and legal bases for, prices and other terms and conditions of his, her or its cross-border business transactions, enabling that taxpayer to exercise a definite influence over the other, and which provides, in the second place, in the event of infringement of that obligation, not only that his, her or its taxable income in the Member State concerned is rebuttably presumed to be higher than that which has been declared, and the tax authorities may carry out an estimate to the detriment of the taxpayer, but also that a surcharge.

Proceedings concerning a surcharge on the taxable income for failure to comply with the tax obligation to keep documents concerning cross-border business relations between related companies.

Self-employed commercial agents – Termination of the agency contract by the principal – Compensation of the agent – Goodwill indemnity – Sub-agency – Right of the subagent to a proportion of the goodwill indemnity payable to the main agent corresponding to the customers brought by the subagent - Concept of ‘substantial benefits’

Key aspects of the decision in the economic range:

That the goodwill indemnity which has been paid by the principal to the main agent in respect of the customer base brought by the subagent. The payment of a goodwill indemnity to the subagent may be regarded as not being equitable where the subagent continues his or her commercial agency business in relation to the same clients but in the context of a direct relationship with the main principal, which replaced the main agent.

Concept of ‘substantial benefits’.

Proceedings concerning a goodwill indemnity claimed by the former from the latter on the basis of turnover that H is alleged to have generated as a result of the new clients acquired for his benefit by NY.

Legal force of electronic signatures - Advanced electronic signature requirements - An administrative act issued as an electronic document, signed with an electronic signature, which does not meet the requirements for a "qualified electronic signature" - Lack of "qualified electronic signature certificate" - Enrollment of a qualified electronic signature in the certificate issued by the trust service provider - Names of the holder of the electronic signature, which are transliterated in Latin, instead of being written in Cyrillic, as is usual"

Key aspects of the decision in the economic range:

An administrative act issued as an electronic document may be declared void when it is signed with an electronic signature that does not meet the requirements to be considered a "qualified electronic signature." In the absence of a "qualified electronic signature certificate", there is sufficient reason to assume that the electronic signature does not constitute a "qualified electronic signature", and in this regard, its possible designation as a "professional electronic signature" is irrelevant. If an electronic signature is entered in the certificate issued by the certificate service provider, this is not enough to be considered a "qualified electronic signature".

Dispute regarding a revision act for charging the value added tax.

Combating late payment in commercial transactions — Practice established before 16 March 2013 consisting in not recovering interest for late payment or compensation for recovery costs — Practice applied to individual orders placed on or after that date — Grossly unfair contractual terms and practices — Waiver freely agreed to

Key aspects of the decision in the economic range:

Consequences of late payment. A practice under which, in the case of delays in payment of less than one month, the creditor does not recover interest for late payment or compensation for recovery costs, in exchange for payment of the principal amount of the debts payable, provided that, in so doing, the creditor has freely agreed to waiving payment of the sums due in respect of that interest and compensation.

Proceedings, concerning the late settlement of 135 invoices.

Management companies of UCITS — Obligations regarding information provided to investors — Obligation to update „the essential elements of prospectuses“ — Composition of the management company's body — Transposition into the legal system of the Member States — National legislation that expands the hypotheses, in which an offense related to the updating of prospectuses can be established and sanctioned — Concept of „essential elements of prospectuses“

Key aspects of the decision in the economic range:

Essential elements of prospectuses, which must be kept to update. Information about the management company that the prospectus must at least contain. Scope of the concept „essential elements of prospectuses“. Financial penalties. National legislation under which a management company that has failed to comply with the obligation to update the prospectuses in respect of several UCITS is penalized with an administrative sanction for each of those undertakings.

Proceedings regarding a pecuniary sanction imposed on a company for failure to fulfill the obligation to update the prospectus of an undertakings for collective investment in transferable securities (UCITS) managed by it.

Fighting the delay in payment of commercial transactions - Collection by a public authority of debts assigned by businesses to a debt collection company - Compensation for collection costs incurred by the creditor in the event of late payment by the debtor - Minimum fixed amount of 40 EUR - Transactions between enterprises and government bodies - Procedure for establishing the conformity of goods or services - Account of value added tax for the purposes of calculating interest on late payment - Concept of "amount owed"

Key aspects of the decision in the economic range:

Compensation to the creditor for collection costs incurred as a result of late payment by the debtor is due for each commercial transaction for which the remuneration is not paid on time and which is documented in an invoice. Payment term for the procedure for certification of the conformity of the goods or services provided for in the law or in the contract. National legislation, which generally provides for all commercial transactions between enterprises and state bodies a payment term with a maximum duration of 60 calendar days.

Concept of "amount owed".

A dispute between B and a health authority concerning the collection of receivables from that authority corresponding to the remuneration payable as consideration for the supply of goods and services by medical center enterprises to that authority.

Judicial cooperation on civil law matters - Defendant with a residence in a third country - Competence in individual employment contracts - A relationship of authority and submission - Individual employment contract - A guarantee agreement concluded between the worker and a third party guaranteeing the fulfillment of the employer's obligations to that worker - Concept of “professional activity”

Key aspects of the decision in the economic range:

Jurisdiction, recognition and enforcement of judgments. An individual employment contract concluded between an employer and an employee. A guarantee agreement on which the conclusion of the employment contract with a third party depended. A claim based on a warranty agreement. A claim related to an employment contract. Conditions for the application of the national rules on competence.

Concept of “professional activity”.

Dispute between R and F in connection with the refusal of R, which by virtue of a guarantee agreement is responsible to F for the performance of obligations arising from an employment contract entered into between the latter and a subsidiary of R, in connection with the payment of claims arising from the latter contract.

 

September

 

Value added tax - Financial lease agreement - Persons liable for payment of VAT - Sale and lease back - Details which must appear on the invoice - Possibility of treating a written contractual agreement as an invoice

Key aspects of the decision in the economic range:

Contractual sale-and-lease back agreement, the conclusion of which was not followed by the issue of an invoice by the parties, may be regarded as an invoice, within the meaning of that provision, where that contractual agreement contains all the information necessary for the tax authorities of a Member State to be able to establish whether the substantive conditions for the right to deduct VAT are satisfied.

Proceedings between R Leasing and the Ministry of Finance concerning the imposition of value added tax.

Freedom of establishment and freedom to provide services – Single market in insurance - Consumer protection - Membership of a group insurance policy – Assignment of rights under the insurance contract – Insurance benefits in the event of sickness or accident abroad – Remuneration paid by the member in consideration for the insurance cover acquired – Consumer protection – Equal treatment of insurance intermediaries - Definition of „insurance intermediary“, „insurance mediation“, „remuneration“ and „insurance distribution“

Key aspects of the decision in the economic range:

Freedom of establishment. Enabling consumers to join group insurance. Activities of insurance and reinsurance mediation by natural and legal persons. Legal person whose activity consists in offering its customers membership on a voluntary basis, in return for a payment that it receives from them, of a group insurance policy to which it has subscribed previously, where that membership entitles those customers to insurance benefits in the event. Definition of „insurance intermediary“, „insurance mediation“, „remuneration“ and „insurance distribution“.

Proceedings concerning the activity of insurance mediation carried out without authorisation.