Claims settlement services are not “services supplied by consultants, engineers or lawyers”. Uniqa Asigurări, C-267/21, judgment, 1.08.2022   The Romanian entity was an insurance company. Customers from various countries (including non-EU) purchased insurance services from the Company. In the event of a damage, the customer filed a claim with the insurance company's corresponding affiliate in the relevant country for the customer. This local company carried out the claim settlement procedure (investigation of the causes, inspection of the policy, estimation of the damage, proposing solutions for the settlement of the damage, verification of the cost estimate, settlement with the repair shop…

If you don’t mention “reverse charge” on the invoice – no triangulation simplification applies. (Luxury Trust Automobil, C-247/21, opinion, 14.07.2022) British, Austrian and Czech companies carried out triangular transactions. Transportation was organized by the Austrian company. There were two sales and one shipment of goods from the UK to the Czech Republic. The Austrian company, an intermediary, treated these transactions as simplified triangular transactions. It used its VAT number and the VAT number of the Czech counterparty on its invoices. It also indicated on its invoices the clause "tax-exempt intra-Community triangular transaction." It did not show VAT on the invoice,…

If you are not registered, you need to pay VAT – even if the transaction is subject to reverse charge. (DGRFP Bucureşti, C-146/21, judgment, 30.06.2022) A Romanian entity VB was the owner of a forested land. It was used by her to sale of standing timber. During the tax audit the authorities concluded that VB had exceeded special upper limit for exemption for small businesses but she had not registered for VAT purposes and had not paid VAT resulting from the sale. Consequently, tax authorities assessed the tax liability. At the same time, Romanian VAT legislation (according to implementing decision…

Joint and several VAT liability – is it compliant with EU law? (Direktor na Direktsia „Obzhalvane i danachno-osiguritelna praktika“, C-1/21, opinion, 2.06.2022) Mr. MC served as a board member of a Bulgarian company. A tax decision was issued against the company. Pursuant to the decision, the company was obliged to pay VAT with interest. The enforcement of these amounts turned out to be ineffective. Some circumstances indicate that MC in bad faith led to depletion of the company's assets, due to which the company did not pay the tax. As a result, the tax authority held MC liable for the…

Subparticipation service may (and may not) be exempt from VAT (O. Fundusz lnwestycyjny Zamknięty reprezentowany przez O, C-250/21, opinion, 12.05.2022) Article 135.1.b of the VAT directive states that exempted are “the granting and the negotiation of credit and the management of credit by the person granting it”. Article 135.1.f of the VAT directive states that exempted are “transactions, including negotiation but not management or safekeeping, in shares, interests in companies or associations, debentures and other securities, but excluding documents establishing title to goods, and the rights or securities (…)”. The case at hand involves subparticipation agreements. The performance of such…

RAIFFEISEN LEASING, C-235/21, opinion, 12.05.2022   The Slovenian company RED owned a land. It entered into a sales and lease back agreement with Raiffeisen leasing to finance construction on the land. As a result of this agreement, RED sold the land to Reiffeisen. Reiffeisen then gave the land to RED to use for payment of rental fees. Raiffeisen did not issue any separate invoice document for rental fees. However, the contract clearly indicated the amount of VAT resulting from the rent payments. The circumstances of the case are not completely clear. However, they show that, according to the tax authorities,…

VAT fraud if you pay to an insolvent knowing that he will not pay VAT to the budget? HA.EN., C-227/21, opinion, 5.05.2022 The bank granted a loan to the borrower. The Lithuanian company acquired from the bank all claims against the borrower resulting from the loan. It confirmed that it had familiarized itself with the borrower's economic and financial situation and confirmed that it was aware of the borrower's insolvency. Subsequently, after an unsuccessful auction of the borrower's assets, the company purchased the property from the borrower. The borrower issued a VAT invoice for this with VAT shown. The company…

Private company offers extracurricular activities for children. Are they exempt from VAT? Happy Education, C-612/20, judgment 28.04.2022 A Romanian company conducts a business of organizing educational activities for children. Its services include homework help, language courses, art courses, sports activities, picking up children from school, and serving meals. Its activities were identical to those set forth in the Romanian state's "school after school" program. The company claimed that its activities were exempt from VAT. Meanwhile, the tax authorities stated that the company's activities did not fall within the scope of the national educational system and it had not obtained the…

“Compulsory” rental agreement concluded by operation of law is subject to VAT and exemptions must be interpreted strictly (Pilsētas zemes dienests, C-598/20, order of 1.12.2021) The case involved land owned by entity A. There was a building on the land. Entity B was the owner of the building. Under Latvian law, a "compulsory" rental relationship was established ex lege between these entities. One of these parties argued that this "forced" rent should be exempt from VAT by virtue of articles 135.1.l and 135.2 of the VAT directive. According to these provisions member states shall exempt the leasing or letting of…

Subsidiary's resources are not VAT fixed establishment of the parent company – so the services supplied by the Romanian subsidiary to the parent company are not taxed in Romania. Berlin Chemie, C-333/20, judgment, 7.04.2022   Last week we wrote about a new ECJ judgment on FE on the horizon. Finally it has been just released.   A German company operates in the pharmaceutical industry. It sells its pharmaceutical products (owned by it) in Romania to Romanian customers. The German company has an agreement to store its goods in a warehouse in Romania (the storage service is provided by a Romanian…