Tax & Legal

In a landmark judgment, the ECJ decided that attributing voting rights based on "acting in concert" without an explicit agreement, as in Section 34( 2) Sentence 1 2nd alternative of the Securities Trading Act, is incompatible with EU law.

In her Opinion, the Advocate General suggested the European Court of Justice decide that Luxembourg has fulfilled its obligation to transpose the Anti-Tax-Avoidance-Directive (ATAD) into national law by including so called securitization companies in the list of 'financial undertakings' for which the interest limitation rule set forth in Article 4 ATAD is not applicable.

In a request for a preliminary ruling from Sweden regarding the refund of withholding tax, the ECJ is asked whether a recalculation of the loss in accordance with the rules of the source State is required for a loss-making non-resident company receiving dividends to benefit from the same treatment as a loss-making resident company. In his Opinion, the Advocate General considers such requirements to be an unjustified and disproportionate burden on foreign corporate entities and a violation of Article 63 TFEU.

In its decision of today, the General Court held that the VAT exemption for “the management of credit by the person granting it” under Article 135(1)(b) of the VAT Directive does not apply in a case where the credit is sold to a third company and whilst the management of that credit is retained by the seller.

In a case concerning VAT for services supplied electronically by a German GmbH through an app store operated by an Irish company, the Supreme Tax Court held that the place of supply of such services to the customers (non-taxable persons) was in Ireland and - pending further facts still to be ascertained by the lower tax court in a second hearing - no German VAT arises.

In its decision today, the European Court of Justice held that inclusion in a U.S. sanctions list is not, in itself, sufficient grounds to refuse to open a bank account. Such a denial may only be made following a case-by-case assessment by the bank regarding the risk of money laundering and terrorist financing.

In a Dutch case, the General Court of the European Union decided that exemption for services provided by a member of a VAT group in the field of health care and social care can only be granted if the relevant group member itself meets the legal requirements for VAT exemption.

In a request for a preliminary ruling from Portugal the ECJ held, that the national legislation which provides taxation of a transaction involving the formation of a capital company the share capital of which is fully paid up by means of shares held in other companies owning immovable property, and which receives as consideration the entire share capital of the company thus formed contravenes the Directive 2008/7/EC concerning indirect taxes on the raising of capital.

The Italian trust mandates (of fiduciary arrangements) are subject to EU anti-money laundering transparency rules. According to a decision of the European Court of Justice, public access to beneficial ownership data remains compatible with EU fundamental rights, provided that it is strictly conditioned on proving a legitimate interest.

In a most recent decision, the European Court of Justice held that action on the part of the debtor dating back a number of years and the fact that there is, in the Member State in which the debtor is established, a law capable of hindering the enforcement of the claim concerned may be taken into account in establishing urgency for a European Account Preservation Order.

In three cases from Italy, the European Court of Justice decided that the freezing of funds and economic resources linked indirectly, through trust structures, to persons subject to restrictive measures taken by the European Union in view of Russia’s military aggression against Ukraine does not contravene EU law.

In two combined requests for a preliminary ruling from the Berlin-Brandenburg Tax Court, the General Court of the EU decided that the purchase of tobacco products by a private individual in one Member State for the purpose of transferring them free of charge to a third party in another Member State is not eligible for exemption from tobacco tax as being for “personal use”.

In a most current judgment, the European Court of Justice held in favor of the applicant, namely that adjustments of the transfer prices of motor vehicles between manufacturers and distributors based on the warranty costs and operating costs incurred by the purchaser are not consideration for a supply of services subject to VAT. However, with one caveat: The situation would be different if the parties concluded a service agreement to that effect.

In its decision of today, the European Court of Justice held that publishers of press publications may be entitled to fair remuneration when they grant online service providers authorization to use their publications.

In today’s decision, the European Court of Justice held that the no-poach of players agreement concluded by Portuguese football clubs during the Covid-19 pandemic might be compatible with EU law.

In a most recent judgment following a Polish request for a preliminary ruling, the General Court of the EU confirmed the incompatibility of the local input VAT regulations with EU Law and held that the right to deduct input VAT arises with the supply and the chargeability of the tax, and must not depend on the immediate possession of an invoice provided that the taxable person did receive the invoice before submitting the VAT return. Any national “forced deferral” violates the principle of fiscal neutrality.

The European Court of Justice must currently review an Italian regulation that prevents certain companies from benefiting from a more favorable rule regarding the deductibility of interest expenses in the case of a cross-border group taxation scheme solely because their common parent company is resident in another Member State. Advocate General Juliane Kokott presented her Opinion on the matter and suggests the court decide that such national legislation is not hindered by the freedom of establishment under Articles 49 and 54 TFEU.

In a most recent judgment, the European Court of Justice addressed the issue whether VAT on mandatory healthcare equipment for tax-exempt services can be proportionally deducted if those items are also used for additional taxable services. The decision suggests that a statutory obligation to purchase goods and services doesn't automatically grant deduction, but that proportional deduction is possible if a direct link to taxable activities exists.

In a most recent judgment, the European Court of Justice held, that the German legislation which excludes the reduced VAT rate applicable to short-term accommodation services provided in hotels and similar establishments which are not directly used for that accommodation is not in breach of EU law. Those rules must, however, be applied to concrete and specific aspects of the categories of accommodation services referred to in point (12) of Annex III of the VAT Directive and ensure that the principle of fiscal neutrality is preserved.

In a request for a preliminary ruling from the Düsseldorf Tax Court, the European Court of Justice dealt with the interpretation of Article 3i of Regulation (EU) No. 833/2014 on the import ban on certain goods from Russia listed in Annex XXI. Specifically, the case concerns the seizure by the main customs office of a used vehicle purchased in Russia and then imported into Germany.