Court of Justice of the European Union
Judgment of 7 November 2013 (Case C-249/12 and C-250/12)
Taxation – VAT – Directive 2006/112/EC – Articles 73 and 78 – Immovable property transactions carried out by natural persons – Classification of those transactions as taxable – Determination of the VAT owing when the parties have made no provisions for it at the time of conclusion of the contract – Question as to whether or not the vendor may recover the VAT from the purchaser – Consequences

In the judgment above, the Court of Justice ruled that Council Directive 2006/112/EC of 28 November 2006, on the common system of value added tax (“VAT Directive”), should be interpreted as meaning that, when a contract of sale or for the supply of services is concluded without the parties making any mention of VAT at the time the price is defined, and considering that the supplier is a taxable person subject to VAT, the price agreed must be considered as already including VAT, if the supplier cannot recover the VAT on that transaction from the purchaser in accordance with the applicable national legislation.

However, if under the applicable national legislation the suppliers can recover the VAT on the transaction in question, the price agreed must be regarded as not including VAT.

Court of Justice of the European Union
Judgment of 7 November 2013 (Case C-322/11)
Request for a preliminary ruling – Articles 63 and 65 of the TFEU – Free movement of capital – Tax legislation of a Member State which does not allow deduction of the loss on the sale of immovable property situated in another Member State from the gain on the sale of securities in the Member State of taxation

In this judgment, the Court of Justice was requested to rule on the compatibility with European law of national legislation of a Member State that does not allow a taxpayer who resides in that State, and is liable to income tax in that State, to deduct the losses arising from the transfer of immovable property situated in another Member State from the income from moveable assets taxable in the first Member State, although that would have been possible, albeit on certain conditions, if the immovable property had been situated in the first Member State.

The Court of Justice held that tax legislation with such provisions is compatible with European Law, if the first Member State did not exercise any tax power over the profits deriving from the transfer of immovable property in another Member State.

Indeed, despite the fact that such legislation contains a difference in treatment that entails a restriction of the free movement of capital, there is a direct link between the non-taxation of profits from the transfer of moveable assets in another Member State and the non-deductibility of losses arising from those transfers, for which reason the restriction is justified by an overriding reason in the public interest relating to the need to safeguard the balanced allocation of the power to impose taxes between Member States and ensure the cohesion of tax systems.

Court of Justice of the European Union
Judgment of 21 November 2013 (Case C-494/12)
Directive 2006/112/EC – Value added tax – Supply of goods – Concept – Fraudulent use of a bank card

In the Judgment above, the Court of Justice decided that the fraudulent use of a bank card as a means of payment of a good does not affect the ability of the transaction carried out being classified as a “delivery/transfer of goods” or not.

Indeed, the concept of “supply of goods” covers any transfer of tangible property by one party which empowers the other party actually to dispose of it as if he were is owner, independently from the forms of transfer of property provided for in national legislations.

The fact that the buyer does not pay the price directly to the supplier, but rather through the card issuer, which undertook to pay to the supplier the goods sold by it to purchasers that used the cards issued by it as payment means, does not change the classification of the transaction as a supply of goods for consideration.