News

31.10.2017

New Judgments of the ECJ For October

     Tax & Financial Standards

New

Judgments of the ECJ

For October

New Cases

C‑573/16 of 19 October 2017

 

Indirect taxes on the raising of capital - Imposition of a duty of 1.5% on the transfer into a clearance service of newly issued shares or shares intended to be listed on a stock exchange of a Member State

 

Key aspects of the decision in the economic range:

Indirect taxes on the raising of capital. Tax collection on certain transfers of shares. Taxation of a transfer of shares, whereby the legal title to all the shares in a company has been transferred to a clearance service for the sole purpose of listing on a stock exchange, without there being any change in the beneficial ownership of those shares.

            Proceedings concerning the levying of a tax on certain transfers of shares.

 

C-101/16 of 19 October 2017

Value added tax. Right to deduct and conditions governing the exercise of that right. Fight against tax evasion and tax avoidance. Invoice issued by a taxpayer declared ‘inactive’ by the tax authorities. Refusal to take into account evidence of the absence of tax evasion or tax losses. Limitation of the temporal effects of the judgment to be delivered

Key aspects of the decision in the economic range:

The right to deduct value added tax paid on the supplies of services - refusal of the right to deduct. Transactions concluded with trader declared inactive. Risk of tax evasion. National rules under which a taxable person is denied the right to deduct on the ground that the person upstream, who issued the invoice in which the expenditure and the VAT are indicated separately, has been declared inactive by the tax authorities.

in the context of a dispute between, on the one hand, SC Paper Consult SRL and, on the other hand, Regional Directorate-General of Public Finances and Regional Public Finance Administration, concerning a challenge brought by Paper Consult against an administrative decision which denied it the right to deduct value added tax which it had paid on the supplies of services purchased from SC Rom Packaging SRL, on the ground that the latter had been declared an ‘inactive’ taxpayer at the date on which the contract was entered into.

C-404/16 of 12 October 2017

The common system of value added tax. Taxable amount - reduction in the case of cancellation or refusal. Financial leasing agreement terminated for non-payment of public charges. Concepts of ‘cancellation’ and ‘refusal’ under a financial leasing agreement with definite transfer of ownership

Key aspects of the decision in the economic range:

A reduction of the taxable amount for value added tax following the termination of several financial leasing agreements owing to breaches of contract by the lessees. An act of refusal by which a party to a financial leasing agreement with definite transfer of ownership has definitively terminated the agreement. Concepts of ‘cancellation’ and ‘refusal’ under a financial leasing agreement with definite transfer of ownership.

In proceedings between Lombard and Appeals Directorate of the National Taxation and Customs Authority, concerning the latter’s refusal to allow the correction of invoices which Lombard had made with a view to obtaining a reduction of the taxable amount for value added tax following the termination of several financial leasing agreements owing to breaches of contract by the lessees.

C-661/15 of 12 October 2017

Community Customs Code. Repayment of import duties - import of vehicles and determination of the customs value. Revision of the declaration. Taking account, for the customs valuation, payments made by the seller to the purchaser under a contractual warranty obligation. The concept of ‘defective goods’

Key aspects of the decision in the economic range:

Customs union. The repayment or remission of import duties where the importer rejects the goods as defective or otherwise not in accordance with the contract. Risk of defects. A reduction in the purchase price, after their import, and that that reduction is the result of a finding that those cars had a manufacturing defect. The concept of ‘defective goods’.

in proceedings between X BV and the State Secretary for Finance, in respect of the latter’s rejection of its claims for reimbursement of customs duties on vehicles.

C‑262/16 of 12 October 2017

Value added tax - Common flat-rate scheme for farmers - Certificate to use the common flat-rate scheme for farmers - Exclusion from the common scheme - Concept of ‘category of farmers’

Key aspects of the decision in the economic range:

Farmers, for whom a flat-rate scheme is provided. Farmers who are found to be recovering substantially more as members of the flat-rate scheme than they would if they were subject to the normal VAT arrangements or the simplified VAT arrangements. Cases in which a Member State may exclude a farmer from the flat-rate scheme.

            Proceedings concerning the cancellation of the certificate to use the common flat-rate scheme for farmers that had been issued to a partnership.

C‑413/15 of 10 October 2017 

Third Party Liability Insurance for Motor Vehicles. A body charged with compensation for property or bodily harm caused by an unidentified or uninsured vehicle. Conditions under which a private body may be considered to be an emanation of the State and be subject to the provisions of a directive having a direct effect.

Key aspects of the decision in the economic range:

Compulsory insurance. Automobile insurance activity. Compensation for personal injury as a result of a road traffic accident. Liability in the event of personal injury to all passengers except the driver. Elimination of the State in determining the liability of a Member State for improper transposition of a directive - Conditions under which an individual is considered to be an emanation of the State. Possibility to refer to a directive against a State.

C-164/16 of 4 October 2017

Value added tax. Supply of motor vehicles. Finance lease with an option to purchase. the classification of a contract as a ‘finance lease’. ‘Contract for hire which provides that in the normal course of events ownership is to pass at the latest upon payment of the final instalment’

Key aspects of the decision in the economic range:

Certain transactions subject to VAT. A contract for the leasing of a motor vehicle with an option to purchase. Immediate acquisition of full ownership, the lessee having the use of the goods without being required to pay the full purchase price for them when they are handed over to him. The words ‘contract for hire which provides that in the normal course of events ownership is to pass at the latest upon payment of the final instalment’.

Judgment concerning the classification of the handing over of vehicles pursuant to a standard agreement, with regard to transactions subject to valued added tax.

C-273/16 of 4 October 2017

Exemption from VAT. Relief from import duties for goods of negligible value or of a non-commercial character. Exemption of the supply of services relating to the importation of goods. Levying VAT on the transport costs of documents and goods of negligible value despite their being ancillary to non-taxable goods.

Key aspects of the decision in the economic range:

A complaint with the European Commission seeking the initiation, pursuant to Article 258 TFEU, of infringement proceedings regarding the transport costs of imported goods of negligible value being subject to VAT. The taxable amount relating to the importation of goods. Application of an exemption from VAT for ancillary services, including transport services, not only that their value is included in the taxable amount, but also that VAT has in fact been charged on those services at the customs stage at the time of importation. Exemption of the supply of services relating to the importation of goods where the value of such services is included in the taxable amount. ‘Inbound’ transport services, namely receiving international consignments.

Judgment in proceedings, concerning the levying of value added tax on transport costs connected to the importation of goods exempt from VAT.

C-605/15 of 21 September 2017

Value added tax. Exemptions for certain activities in the public interest - an exemption of the supply of services by independent groups of persons, which are carrying on an activity which is exempt from VAT - Applicability to insurance

Key aspects of the decision in the economic range:

VAT legislation. Exemption of an independent group of persons pursuant to Article 132(1)(f) of the VAT Directive. Application to insurance services. Obligation on the Member States to expand upon a directly-effective provision of a directive.

2017 C- 326/15 of 21 September

The common system of value added tax - Exemptions for certain activities in the public interest - An economic activity in the area of financial services - Exemption for the supply of services by independent groups of persons for their members

Key aspects of the decision in the economic range:

Supply of services by independent groups of persons, who are carrying on an activity which is exempt from VAT. Exemptions for financial services. VAT exemption when the taxable person has applied an uplift to the transactions, as required under the legislation on direct taxation of the Member State where the taxable person is established.

Judgment concerning the National Tax Authority’s refusal of the request submitted by DNB Banka to have its value added tax (VAT) declarations corrected.

C - 429/16 of 21 September 2017

Social policy - Collective redundancies - Assimilation to redundancies of ‘terminations of an employment contract which occur on the employer’s initiative’ - Unilateral amendment by the employer of working and pay conditions - Concept of ‘Concept of ‘redundancies’’

Key aspects of the decision in the economic range:

Approximation of the laws of the Member States relating to collective redundancies. 

Determination of the employer’s ‘intention’ to effect redundancies.

 Assimilation to redundancies of ‘terminations of an employment contract which occur on the employer’s initiative’. Notice on the ground of the ‘need to carry out restructuring of the  personnel costs dictated by the difficult financial situation’. Unilateral amendment by the employer of working and pay conditions.

            Proceedings concerning a hospital’s decision to issue employees with notices of amendment, leading to the termination of the employment relationships of some of those employees without the redundancy procedure.

C-628/15 of 14 September 2017

Free movement of capital - Corporation tax - Refusal to grant the tax credit to shareholders - remedies to shareholders who have received dividends but have not obtained a tax credit in respect of those dividends

Key aspects of the decision in the economic range:

A right to a tax credit to a pension fund not subject to tax on its investment income in respect of its receipt of dividends representing foreign-sourced income. Refusal to grant the tax credit to shareholders not subject to tax on investment income for dividends arising from foreign income. Reimbursement of tax paid in advance in the case of dividends paid by companies established in other Member States to a company established in the United Kingdom. Tax credit unlawfully withheld.

Judgment concerning the refusal to recognise a right to a tax credit to a pension fund not subject to tax on its investment income in respect of its receipt of dividends representing foreign-sourced income of a company resident for tax-purposes in the United Kingdom.

          

C-441/16 of September 2017

 

The right to a refund of VAT - Taxable person residing in another Member State - Objective elements confirming the intention of the taxable person to use the imported goods in the course of his economic activities

Key aspects of the decision in the economic range:

Arrangements for the refund of value added tax to taxable persons not established in the territory of the country. Necessary information as regards the substantive condition for the refund relating to the use of the imported goods in connection with taxable transactions. Serious risk of non-completion of the transaction that justified the importation.

Judgment in proceedings relating to the refund of value added tax.

 

C-186/16 of 20 September 2017

 

Consumer protection - loan agreement concluded in a foreign currency. Scope and level of detail of the information required to be provided by the bank - Time for the assessment of whether there is a significant imbalance between the rights and obligations of the parties arising under the contract - Notion of ‘main subject matter of the contract’

Key aspects of the decision in the economic range:

 

Unfair terms in consumer contracts. Exchange rate risk born entirely by the consumer. Significant imbalance in the parties’ rights and obligations arising under the contract. A term incorporated in a loan agreement entered into in a foreign currency concluded between a seller or supplier and a consumer, which has not been negotiated individually, pursuant to which the credit must be repaid in the same currency. Level of information to be procured by the bank. Notion of ‘main subject matter of the contract’.

Judgment in proceedings concerning the alleged unfair terms incorporated in loan agreements providing, in particular, for the repayment of loans in the same foreign currency as that in which they were disbursed.

 

C‑569/15 of 13 September 2017

 

Application of social security schemes - Migrant workers - Income tax

 

Key aspects of the decision in the economic range:

 

Application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community. Person normally employed in the territory of two or more Member States . Person employed in one Member State and engaged in paid employment on the territory of another Member State during a period of unpaid leave lasting three months.

Proceedings, concerning an assessment in respect of income tax and social insurance contributions.

C-132/16 of 14 September 2017

 

VAT legislation - deduction of input tax. Services supplied free of charge for the benefit of the municipal infrastructure, link with the economic activity of the taxable person - Services relating to construction or improvement of a property belonging to a third party - Entry of costs incurred for services carried out in the accounts as part of the taxable person’s general costs

Key aspects of the decision in the economic range:

The right to deduct input VAT in respect of a supply of services consisting of the construction or improvement of a property owned by a third party when that third party enjoys the results of those services free of charge and when those services are used both by the taxable person and by the third party in the context of their economic activity. Determination of the existence of a direct and immediate link with the economic activity of the third party or the economic activity of the taxable person.

Judgment in proceedings concerning two adjusted tax notices addressed to ‘Iberdrola Inmobiliaria Real Estate Investments’ EOODand relating to the entitlement to deduct input value added tax.

C-6/16 of 7 September 2017

Direct taxation - Withholding tax - Dividends distributed by a resident subsidiary to a non-resident parent company controlled directly or indirectly by one or more residents of third States. Fraud, tax evasion and abuse

Key aspects of the decision in the economic range:

The common system of taxation applicable in the case of parent companies and subsidiaries of different Member States. Withholding tax on dividends paid abroad. Prevention of tax evasion. Misuse of rights.

The case essentially concerns the question of the circumstances in which a Member State may refuse - on grounds of preventing tax evasion - an exemption from withholding tax that would normally be granted for the dividend payments of a resident subsidiary to its non-resident parent company.

Judgment in proceedings, concerning the refusal of the French tax authorities to exempt from withholding tax dividends distributed by Euro Stockage to Enka, the parent company of Euro Stockage.

C‑248/16 of 7 September 2017

Control of concentrations between undertakings - Change in the form of control of an existing undertaking - Definition of ‘concentration’

 

Key aspects of the decision in the economic range:

 

Control of concentrations between undertakings. Concentrations that may significantly impede effective competition in the internal market or in a substantial part of it. Division of competences between the European Commission and the national bodies responsible for merger control.

            Change in the form of control of an existing undertaking which, previously exclusive, becomes joint. Change from an Existing non-full-function undertaking to a Community non-full-function undertaking. Creation of a joint venture performing on a lasting basis all the functions of an autonomous economic entity.

            Proceedings concerning an alleged concentration.

Expect:

C-387/16

Taxation - Value added tax - Directive 2006/112 / EC - Article 183 - Deduction of input tax - Reimbursement of excess tax - Interest on repayment of overdue tax after the period - non-taxable persons - Tax neutrality - Principle of equivalence and effectiveness - Legal certainty and protection of legitimate expectations

C-396/16

Common system of value added tax (VAT) - Article 184 - Correction of deductible input VAT - Article 185 (1) - Change in the factors used to determine the amount of the deduction - Article 185 (2) No final payment or final payment - Approved final safeguard - Articles 90 and 185 (2), second subparagraph - Tax neutrality - Collection of all VAT due in the national territory - Obligation of consistency in the application of the scheme Mite adjustment of taxation and deduction in the event of payment default

Joined cases C‑398/16 & C‑399/16

Reference for a preliminary ruling - Corporation tax - Freedom of establishment - Deduction by a resident parent company of interest on a loan for the acquisition of shares by a foreign subsidiary - Deduction by a resident parent company of a loss in the value of its shareholding in a subsidiary as a result of exchange differences - Consolidated group