News

04.07.2017

New judgments of the court May & June

Tax & Financial Standards

Expect:

Judgment C‑132/16

Reference for a preliminary ruling of Bulgaria

Reference for a preliminary ruling - VAT legislation - Deduction of tax - Free supply of services in favor of municipal infrastructure - Link to the economic activity of the taxable person - Economic purpose in relation to a link of conduct - Accounting for costs as general costs)

Judgement 648/15

Article 273 TFEU — Dispute between Member States submitted to the Court under a special agreement between the parties —Interpretation of a convention for the avoidance of double taxation — Taxation of particular certificates or financial instruments (Genussscheine) — Interest from debt-claims — Concept of ‘income from rights or debt-claims with participation in profits’ — Profit-sharing bonds — Profit-participating loans — Silent partner

New Cases

Case from June C-571/15

Value added tax - Community Customs Code - External transit procedure - Incurrence of a customs debt and chargeability of VAT in cases of unlawful removal from customs supervision - Goods transported through a free port located in a Member State - Legislation of that Member State excluding free ports from its national fiscal territory

Key aspects of the decision in the economic range:

International trade. Incurrence of a customs debt and chargeability of VAT. Place of taxable transactions. Removal from customs supervision. Goods which had been brought into the customs territory of the European Union, after having been placed in temporary storage for a short period - the customs seal having been broken.

            In proceedings concerning obligation to pay the value added tax arising as a consequence of the incurrence of a customs debt.

Case from June C-54/16

Area of freedom, security and justice - Insolvency proceedings - Acts detrimental to all the creditors - Conditions in which the act in question may be challenged - Act subject to the law of a Member State other than the State of the opening of proceedings - Location of all the elements of the situation concerned in the State of the opening of proceedings

Key aspects of the decision in the economic range:

Judicial cooperation in civil matters. Insolvency proceedings. Unenforceability of legal acts detrimental to all the creditors. Payments made after the contractual deadlines had expired, at a time when it was well known that the company was insolvent.

            Choice of law applicable to contractual obligations. Parties to a contract, who have their head offices in a single Member State on whose territory all the other elements relevant to the situation are located, have designated the law of another Member State as the law applicable to that contract.

            In proceedings between Vinyls Italia SpA, in liquidation, and Mediterranea, concerning an action to set certain transactions aside and for the repayment, by Mediterranea, of sums which Vinyls Italia SpA paid to it in the six months preceding the declaration of insolvency.

Case from June C-580/15

Agreement on the European Economic Area - Deposits received by credit institutions established in another Member State of the European Economic Area - Tax legislation - Income tax - ax exemption reserved to interest payments by banks complying with certain statutory conditions

Key aspects of the decision in the economic range:

A tax system which is applicable without distinction to the remuneration received from a savings deposit. Indirect discrimination. Banks established in Belgium and banks established in another Member State. A national tax exemption system applicable to income from savings deposits held with banking service providers. Certain criteria, laid down by statute, such as denomination in euros, withdrawal limits and a method for calculating remuneration that must consist of basic interest and a fidelity premium.

            In proceedings concerning the refusal to grant a tax exemption for remuneration received from a savings deposit in a Member State other than the Kingdom of Belgium.

Case from June C-26/16

Value added tax – Exemptions - An intra-Community supply of a new means of transport - Purchaser’s residence in the Member State of destination - Temporary registration in the Member State of destination - Risk of tax evasion - Good faith of the vendor

Key aspects of the decision in the economic range:

Intra-Community transactions. Conditions for the grant of the exemption for an intra-Community supply of a new means of transport. Supply of new means of transport, dispatched or transported to the customer at a destination outside their respective territory but within the Union, by or on behalf of the vendor. Tax and Customs Authority`s refusal to exempt a transaction from value added tax as an intra-Community supply of a new means of transport. Good faith - obligation of diligence on the part of the vendor.

Case from June C-38/16

Value added tax - Right to deduct VAT - Repayment of overpaid VAT - Detailed rules on repayment - Difference in relation to the period laid down for repayment of deductions wrongly refused - Principles of equal treatment and fiscal neutrality - Principle of effectiveness

Key aspects of the decision in the economic range:

Deduction of input VAT. Tax paid but not due. Claim for repayment of overpaid VAT. National legislation, which, in the context of a reduction in the limitation period, lays down different transitional periods, on the one hand, for claims for repayment of overpaid VAT and, on the other hand, for claims for deduction of input VAT.

        Case from June C-678/15

Consumer protection - Markets in financial instruments - Reception and transmission of orders in relation to one or more financial instruments - Potential inclusion of brokering with a view to concluding a portfolio management contract - Definition of ‘investment services’

Key aspects of the decision in the economic range:

A high level of protection for investors. Organisational requirements and operating conditions for investment firms. Investment service consisting in the reception and transmission of orders in relation to one or more financial instruments. Brokering with a view to concluding a contract covering portfolio management services. Definition of ‘investment services’.

            In proceedings concerning the brokering in connection with an asset management agreement.

       Case from June C-75/16

Consumer protection - Applications by consumers to set an order aside in the context of payment order proceedings instituted by a credit institution - Mediation in civil and commercial matters - Alternative dispute resolution (ADR) procedures - Right of access to the judicial system - National legislation providing for mandatory recourse to a mediation procedure - Obligation to be assisted by a lawyer

Key aspects of the decision in the economic range:

Payment of the debit balance on a current account following the grant of credit facilities - a contract for the opening of a current account guaranteed by a mortgage. An appeal against an order for payment obtained by a credit institution. A complaint by a consumer, of an independent nature in relation to the order for payment proceedings instituted by a trader working in credit. Obligation on the consumer to use a mediation procedure before referring the matter to a judicial body - mandatory assistance of a lawyer. Penalties for withdrawal from a mediation procedure.

Case from June C-249/16

Jurisdiction in civil and commercial matters - The reimbursement of monthly payments, due under a joint credit agreement - Recourse claim between jointly and severally liable debtors under a credit agreement - Determination of the place of performance of the credit agreement - Concepts of ‘matters relating to a contract’ and of a ‘contract for the provision of services’

Key aspects of the decision in the economic range:

A credit agreement concluded between a credit institution and two jointly and severally liable debtors. Claim for repayment made by a debtor against the other jointly and severally liable debtor for banking commitments under a joint credit agreement. Determining the territorial jurisdiction of the court called upon to hear and determine an action for recourse between those debtors. Concepts of ‘matters relating to a contract’ and of a ‘contract for the provision of services’

Case from June C-444/16

Annual accounts of certain types of companies. Company - option issuer per share, which accounts for the option price during the accounting year in which the option was exercised or after the expiration of its term. Principle of true and fair view - Principle of precaution

 

Key aspects of the decision in the economic range:

Posting a provision to cover losses or liabilities that are either probable or secure. Option price accounted for in accrued liabilities and accrued income for future periods. The accounting method whereby a company issuing a share option right shall account for revenue as the proceeds of the exercise of this option during the accounting year in which that option is exercised or when its option expires. Tax audit act as hidden options price options. Principle of true and fair view - Principle of precaution

 

Case from May C-17/16

 

Controls of cash entering or leaving the European Union - Scope of the obligation to declare - International transit area of a Member State’s airport - Notion of a ‘natural person entering or leaving’ the European Union

 

Key aspects of the decision in the economic range:

Rules for the control of cash entering or leaving the European Union. Failing to declare capital. Natural person entering or leaving the European Union. Obligation to declare in the international transit areas of airports located within the territory of the European Union. Notion of a ‘natural person entering or leaving’ the European Union.

In proceedings between Mr Oussama El Dakkak and Intercontinental SARL, and the Customs and Excise Authority concerning their claims for compensation for the loss suffered as a result of the latter’s seizure of cash sums transported by Mr El Dakkak while passing through an airport (France) on the ground that he failed to declare those sums.

Case from May C-33/16

Value added tax - Exemption - Supply of services to meet the direct needs of vessels used for navigation on the high seas - Loading and unloading of cargo by a subcontractor on behalf of an intermediary - Concept of ‘direct needs of a vessels and its cargo’

Key aspects of the decision in the economic range

Supply of services. Exemption from value added tax if the service is supplied to the cargo holder, such as the exporter or importer of the cargo concerned. Exemption only to services which are supplied to the ship owner. Concept of ‘direct needs of a vessels and its cargo’.

In proceedings concerning a tax decision, by which it held that the loading and unloading cargo onto and off a vessel, when supplied by a subcontractor which invoices them to the contracting undertaking rather than to the ship owner directly, do not qualify for the exemption from value added tax.

Case from May C-36/16

Common system of value added tax - Taxable transactions - Transfer to the State or to a local authority of immovable property in order to settle a tax debt - Meaning of ‘supply of goods for consideration’

Key aspects of the decision in the economic range:

Tax law. Taxable person acting as such - taxability of the transfer of property in lieu of payment in discharge of a tax debt. The liability to value added tax of a transaction in which the company transferred ownership of immovable property to a local authority in settlement of a tax debt. Meaning of ‘supply of goods for consideration’.

Case from May C-48/16

Coordination of the laws of the Member States relating to self-employed commercial agents - Self-employed commercial agents - Commercial agent’s commission - Partial non-execution of the contract between the third party and the principal - Concept of ‘reason for which the principal is to blame’

Key aspects of the decision in the economic range:

Protection available to commercial agents vis-à-vis their principals and to the security of commercial transactions. A provision in a contract for commercial agency under which the agent is obliged to return a proportionate part of his commission. Derogation to the detriment of the commercial agent. Concept of ‘reason for which the principal is to blame’.

In proceedings concerning a demand for the repayment of commissions.

Case from May C-59/16

Customs union - Community Customs Code - Customs value - Transaction value - costs, incurred in connection with moving the goods to the customs territory - Concept of ‘cost of transport’

Key aspects of the decision in the economic range:

The customs value of imported goods. A request for payment of additional customs duties. The supplement charged by the forwarding agent to the importer, corresponding to that agent’s profit margin and costs, in respect of the service which it provided in organising the transport of the imported goods to the customs territory of the European Union. Concept of ‘cost of transport’.

In proceedings concerning a request for payment of additional customs duties on the ground that the supplement charged by the forwarding agent ought to have been included in the cost of transport.

Case from May C-365/16

Common system of taxation applicable in the case of parent companies and subsidiaries of different Member States - Prevention of double taxation - The contribution in addition to corporation tax to which a resident parent company is subject on the distribution of profits, including those made by its non-resident subsidiaries

Key aspects of the decision in the economic range:

Eliminating double taxation of profits distributed by a subsidiary to its parent company at the level of the parent company. A tax measure providing for the levy of a tax when the parent company distributes dividends and the basis of assessment of which tax is the amounts of the dividends distributed, including those coming from that company’s non-resident subsidiaries. Contribution of 3% in addition to corporation tax.

In proceedings concerning an action for annulment of an administrative doctrine concerning the contribution in addition.

Case from May C-699/15

Value added tax - Exemptions for certain activities in the public interest - Restaurant and theatre services to paying third parties through an educational establishment as part of training – Concept of ‘closely related’

Key aspects of the decision in the economic range:

The exemption from value added tax of the restaurant and entertainment services. Exemptions. Provision of education in circumstances where the making of supplies of restaurant services and entertainment services is facilitated by the students in the course of their education and as an essential part of their education. Concept of ‘closely related’.

In proceedings between the Commissioners for Her Majesty’s Revenue and Customs and Brockenhurst College (‘the College’) concerning the exemption from value added tax (VAT) of the restaurant and entertainment services supplied by the College.