Case Law

This page shows a summary of relevant case law. To view the section of legislation to which the case law applies, click the link below:

Case Law

ECJ held that there is a right to deduct VAT charged on expenses incurred in the connection with a share issue provided that the transactions undertaken by the taxable person in the context of his economic activities are taxable. A new issue of shares is not a supply for VAT purposes. Kretztechnik AG v Finanzamt Linz Case C-465/03

ECJ held that to allow taxable persons to deduct all input VAT even though, in the context of their normal commercial operations, no transactions conforming to the deduction rules would have enabled them, or allowed them, to deduct such VAT would be contrary to the principle of fiscal neutrality and, therefore, contrary to the purpose of those rules. Halifax plc, Leeds Permanent Development Services Ltd, County Wide Property Investments Ltd v Commissioners of Customs and Excise Case C-255/02

The receipt of dividends does not fall within the scope of VAT as the direct link between the dividend and a supply of services does not exist even where the services are supplied by a shareholder who is paid dividends. An apportionment of input VAT may arise where there is a link to taxable activities also. Cibo Participants S.A. v Directeur Régional des Impôts du Nord-Pas-de-Calais Case C- 16/00

Régie Dauphinoise – Cabnit A. Forest SARL v Ministre du Budget Case C-306/94 considered the concept of ‘incidental transactions’ and the Court ruled that such transactions should be omitted from the calculation of the deductible proportion.

The person claiming a VAT deduction must show that the necessary conditions entitling a deduction are met. The tax authorities can request evidence to support the person’s intention to commence economic activities which will give rise to taxable transactions. INZO v Belgian State Case C-110/94

There must be a direct and immediate link with the taxable transaction for there to be a right to deduct VAT incurred. The ultimate aim pursued by the taxable person is irrelevant. BLP Group PLC v Commissioners of Customs & Excise Case Case C-4/94

The receipt of dividends is not consideration for an economic activity and it does not fall within the scope of VAT. Consequently, such amounts should be excluded from the calculation of the deductible proportion. Sofitam SA v Ministre chargé du Budget Case C-333/91

A taxable person who acquires capital goods for an economic activity has a right to deduct VAT incurred on the acquisition of those goods however small the proportion of business use. Subsequent clawbacks of that VAT will arise based on the amount of non-taxable use of the goods. Hansgeorg Lennartz v Finanzamt Munchen III Case C-97/90

ECJ ruled that where an employer arranges for goods to be supplied to an employee, and bears the cost of those goods, and the employee uses the goods exclusively for the purpose of the employer’s business, the employer may still claim a deduction for VAT charged on those goods. Leesportefeuille ‘Intiem’ CV v Staatssecretaris van Financien Case C-165/86

A person who acquired an interest in a building, yet to be constructed, with a view to letting it under a taxable lease, may be regarded as a taxable person and entitled to claim a VAT deduction. D.A. Rompleman and E.A. Rompleman-Van Deelen v Minister van Financien Case C-268/83

There must be a direct and immediate link between an input transaction and a particular output transaction before a taxable person is entitled to deduct input VAT. Commissioners of Customs & Excise v Midland Bank plc Case C-98/98

ECJ ruled that Member States cannot introduce legislation to retroactively reduce the period for claiming input VAT without implementing transitional arrangements which allow for an adequate period for persons to claim a repayment which they were entitled to under the original legislation. Marks & Spencer plc v the Commissioners of Customs and Excise Case C-62/00

This appeal considers entitlement to VAT deductions relating to transactions connected with the fraudulent evasion of VAT. 68TACD2020

This appeal concerned an entitlement to a VAT deduction for intracommunity acquisitions of goods not used for the purpose of taxable supplies. 104TACD2020

This appeal considered the validity of a VAT invoice and a consequential entitlement to a VAT input credit on the purchase of agricultural single payment scheme entitlments. 109TACD2020