- The reason for non-deductibility may be that the services are tax-exempt (eg financial services).
- Chapter 8 § 4 first paragraph p 5 and second paragraph. The premise is that the various companies in a group are seen as separate entities from a VAT perspective. However, it is not uncommon for groups of companies to organise their activities in such a way that certain companies perform services which are exempt from VAT (such as financing services) for the other group members. The general rule in these cases is that input VAT on purchases is non-deductible. To overcome this problem, the Swedish legislature introduced the option of transferring input VAT between Swedish groups of companies.
- Prop 1978/79:141 Om redovisning av mervärdesskatt mm, p 77.
- Case HFD 4544–4546–11. Judgment was delivered on 10 May 2013.
- Case HFD 1828–12. Judgment was delivered on 10 May 2013.
- Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax.
- Art 11 of the VAT Directive is optional. If the Member States decide to implement a legal order for VAT groupings this must be in compliance with the Directive. For similar reasoning, see Case C-480 Commission v Sweden, para 35 (not yet published).
- Member States wishing to exercise this option must consult the advisory committee on value added tax and may thereafter adopt any measures necessary to prevent tax evasion or avoidance arising from the use of this option.
- Communication from the Commission to the Council and the European Parliament on the VAT group option provided for in Article 11 of Council Directive 2006/112/EC on the common system of value added tax COM(2009) 325 final, p 2.
- For a recent case, see Case C-480/10 Commission v Sweden regarding the Swedish rules (not yet published).
- See Chapter 6a SVATA.
- Prop 1994/95:57 Mervärdesskatten och EG pp 127–9; prop 1997/98:148 Gruppregistrering i mervärdesskattesystemet, mm, p 38.
- In Case C-480/10 Commission v Sweden (not yet referred), Sweden argued that the limitation that the rule should apply only to undertakings which were placed under the supervision of the Finance Inspectorate and therefore covered by a public monitoring system was in accordance with Art 11(2). The ECJ found that the Commission had failed to show that, in the light of the need to combat tax evasion and avoidance, that measure was not well founded. One may question several aspects of this case. Firstly, if one studies the preparatory work to the limitation to the financial sector etc in the Swedish SVATA, one will find other reasons behind the limitation than the one presented to the ECJ (prop 1997/98:148, pp 27 ff). Secondly, the role of the Finance Inspection as it was presented in the case may be questioned. The Court's ruling in this case should not be over-interpreted, but this author would not be surprised if the Swedish legislator were to keep the limitation on the possibility to create VAT groupings to undertakings in the financial sector etc based on the outcome of the case.
- The aim of VAT groupings is to simplify administrative practice and combat abuse, according to the Explanatory Memorandum of Art 4(4) of the Sixth VAT Directive. See COM(2009) 325 final, p 3.
- See also Case C-60/90 Polysar [1991] ECR I-3111.
- For further discussion see Eleonor Alhager, Mervärdesskatt vid omstruktureringar (Iustus Förlag, 2001) 223.
- A parallel was drawn with Case C-162/07 Ampliscientifica [2008] ECR I-4019. The case concerned the question of the implementation of the predecessor to Art 11 of the VAT Directive. The ECJ stated that even though the national rules to some extent fulfil the conditions laid down in Art 11, all conditions must be fulfilled. In that case the requirement of consultation was excluded, which meant that the national legislation adopted was in breach of the procedural requirements laid down in the Directive. Unlike the rules on transfer of non-deductible input VAT, the rules applicable in Ampliscientifica were an implementation of the Directive.
- See eg Ben JM Terra and Peter J Wattel, European Tax Law (Wolters Kluwer, 6th edn 2012) 117; Case C-321/05 Hans Markus Kofoed [2007] ECR I-5795, para 42.
- Terra and Wattel, ibid, 117.
- See eg Case C-250/08 Commission v Belgium (not yet published); Case C-155/09 Commission v Greece [2011] ECR I-00065; Case C-253/09 Commission v Hungary (not yet published).
- Case C-97/09 Ingrid Schmelz [2010] ECR I-10465, paras 46–72.
- See n 19 above.
- See eg Case C-200/98 X AB and Y AB mentioned above. This author cannot see how later case law of the ECJ might change this conclusion. The case law on disparities, neutralisation, etc does not really fit in this situation. See Katia Cejie, Utflyttningsbeskattning av kapitalökningar: en skattevetenskaplig studie i internationell personbeskatting med focus på skatteavtals- och EU-rättsliga problem (Västra Aros, 2010) 265–300.
- Alhager (n 16) 227 f.
- Katia Cejie, ‘Emigration Taxes—Several Questions, Few Answers: From Lasteyrie to National Grid Indus and Beyond' (2012) 40 (6/7) Intertax 390; Michael Lang, ‘Recent Case Law in the ECJ in Direct Taxation: Trends, Tensions and Contradictions' (2009) 3 EC Tax Review 98.
- In the case law in recent years, the following reasons have been considered appropriate to justify restrictive national measures (regarding tax law): the effectiveness of fiscal supervision, the prevention of abuse and the combating of tax evasion, the coherence of the fiscal system, and the balanced allocation of taxing rights between Member States (the fiscal principle of territoriality). These arguments can either be used alone or in combination with one another. See eg Case C-446/03 Marks & Spencer [2005] ECR I-10837, Cases C-155/08 & C-157/08 Passeinheim [2009] ECR I-5093, Case C-303/07 Aberdeen [2009] I-5145, Case C-182/08 Glaxo [2009] ECR I-8591, and Case C-311/08 SGI [2010] ECR I-487. See Cejie (n 23) 347–432.
- Per Olof Ekelöf and Henrik Edelstam, Rättegång IV (Norstedts Juridik, 7th edn 2010) 302–4.
- See Case C-311/97 Royal Bank of Scotland plc [1999] ECR I-02651, paras 32–34. The case dealt with direct taxation and direct discrimination.
- See eg Marjaana Helminen, EU Tax Law: Direct Taxation (IBFD, 2009) 8; Terra and Wattel (n 18) 129.
- For an analysis of the territorial limitation in Art 11 of the VAT Directive in relation to freedom of establishment, see Casper Bjerregaard Eskildsen, ‘VAT Grouping versus Freedom of Establishment’ (2011) 3 EC Tax Review 114; see also COM(2009)325 final, p 7.
- ch 35 § 2 a SITA.
- Case RÅ 1987 ref 158, Case RÅ 1993 ref 91 I, Case RÅ 1996 ref 69, and Case RÅ 1998 ref 49.
- If one compares the situation in the SKF case with the rules on group contributions in the SITA, one finds first of all that it is important in which direction the contribution is made, ie from parent company to subsidiary or vice versa. The SAC has also reached different results on this problem based on whether or not there were final losses in the subsidiary. See eg RÅ 2009 ref 13, Case C-446/03 Marks & Spencer [2005] ECR I-10837, and Case C-231/05 Oy AA [2007] ECR I-06373. See also Stig von Bahr, ‘Koncernbidragsmålen avgjorda’ [2009] SvSkT 427; Sven-Erik Holmdahl and Fredrik Ohlsson, ‘Koncernbidragen och EG-rätten’ [2009] Skattenytt 452. Based on the case law a new chapter has been added to the SITA (ch 35a SITA).
- These principles have to some extent been problematised in legal doctrine: see Bjerregaard Eskildsen (n 30) with references. It may once again be noted that the conflict in the cases discussed was not a conflict between primary law and secondary law. For a discussion in Swedish, see Kristina Ståhl, Fusionsdirektivet: Svensk beskattning i EG-rättslig belysning (Iustus Förlag, 2005) 103–8.
- Art 4(3) TEU and Art 288 TFEU, as well as Case C-321/05 Kofoed (n 18) para 41.
- See eg Jörgen Hettne and Ida Otken Eriksson (eds), EU-rättslig metod: teori och genomslag i svensk rättstillämpning (Norstedts Juridik, 2nd edn 2011) 184 f and 187 f.
- The time from presentation of a case to the judges to delivery of judgment is usually three weeks. In this case it took nearly four times as long.
- See also the Tax Authority's reasoning in the application for a review dispensation at the SAC in the cases.
- See Case 283/81 CILFIT [1982] ECR 3415.
- Even though the CILFIT doctrine has been criticised in legal doctrine (see eg Kristina Ståhl, Roger Persson Österman, Maria Hilling and Jesper Öberg, EU-skatterätt (Iustus Förlag, 3rd edn 2011) 29 f) the ECJ continues to refer to it. See eg Case C-617/10 Åkerberg Fransson, para 47 (not yet published)
- It may be noted that at the time of writing there were at least two cases pending before the ECJ where the application of the direct effect doctrine might be elaborated upon by the ECJ. However, these cases do not concern the complexity of relations to the TFEU (Case C-319/12 MDDP and Case C-589/12 GMAC UK plc).
- ch 66 § 7 Tax law on proceedings (Skatteförfarandelagen 2011: 1244).
- See eg Joined Cases C-6/90 and C-9/90 Francovich v Italy [1991] ECR I-5043.
World Journal of VAT/GST Law
Volume 2, 2013 - Issue 2