Michaela Merz

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Italy – Tax authorities may assess under-declared VAT by extrapolation

The Advocate General (AG) has opined that the principles of EU law do not preclude national legislation from assessing a taxpayer, who is presumed to have under-declared VAT, for unpaid VAT by means of estimating that taxpayer’s likely revenues based on studies of comparable taxpayers within the same economic sector. However, the national courts must ensure that principles of law, such as the right to challenge the basis of assessment, are respected (Fontana (C-649/16)). Continue reading

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EU – public consultation on reform of VAT rates policy, small enterprise and definitive VAT System for B2B intra-EU transactions in goods

539368_web_r_by_wandersmann_pixelio-deAs you know the European Commission published three VAT-related consultations at the end of last year to prepare its work for the upcoming year. Each of the three consultations relates to a specific set of reforms already announced in the European Commission’s VAT Action Plan earlier this year. The three consultations relate to: Continue reading

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E-books – ECJ rules reduced VAT rate is not applicable

PwC_R_Jolene.Visser_SouthAfrica_Jhb_P_CW_0013.JPGThe ECJ today delivered its long awaited judgments in the infringements procedures against France and Luxemburg for the application of the reduced VAT rates to e-books.

The court held that in line with VAT Directive and Implementing Regulation e-books qualify as electronically supplied services, in respect of which the reduced VAT rates cannot be applied. Continue reading

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Commission publishes summary of reduced rates consultation

The European Commission has published a summary report on its public consultation with regards to reduced VAT rates. One of the most critical issues seems to be the current application of reduced VAT rates to e-books in some Member States, compared to number of other Member States that apply standard rates. This different VAT treatment results in distortion of competition between Member States. Continue reading

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ECJ referral – Advocate General’s opinion is issued on the VAT treatment of the storage of goods


An ever recurring question of EU VAT is referred to the ECJ namely, whether the storage of goods is a service connected with immovable property, which should be subject to VAT where the warehouse is located (Art 47) or rather it is a regular service which should be taxed in accordance with the general rules (Art 44 of the VAT Directive).  Continue reading

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Italy – VAT grouping will not be possible as expected

The resigning Italian Government did not approve the tax reform package. Due to the fact that the election will take place on February 24 and 25 in Italy, it is likely that the resigning Government will let the draft Decree expire. For the time being, VAT grouping according to article 11 of the VAT Directive will be not introduced in Italy.

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European Court of Justice: Different treatment of issuers and recipients of VAT invoices is possible

In its recent judgment (LVK-56 EOOD v. Bulgaria, C-643/11 –
the ECJ held that in line with Article 203 of the VAT Directive suppliers must pay any VAT included in an invoice irrespective of whether there is an underlying taxable transaction. Continue reading