Under Portuguese VAT legislation farmers were exempted from paying VAT but were not permitted to reclaim input tax. In European Commission v Portuguese Republic (CJEU Case C-524/10) the European Commission applied to the CJEU for a ruling that this contravened Articles 296 to 298 of Directive 2006/112/EC. The CJEU granted the ruling holding that Portugal had ‘failed to fulfil its obligations under Articles 296 to 298 of that directive’.
Why it matters: Articles 295 to 305 of Directive 2006/112/EC provide for a ‘common flat-rate scheme for farmers’. The CJEU upheld the European Commission’s view that the Portuguese legislation which exempted farmers from VAT and did not permit them to reclaim input tax contravened this provision.
Under Portuguese VAT legislation farmers were exempted from paying VAT but were not permitted to reclaim input tax. In European Commission v Portuguese Republic (CJEU Case C-524/10) the European Commission applied to the CJEU for a ruling that this contravened Articles 296 to 298 of Directive 2006/112/EC. The CJEU granted the ruling holding that Portugal had ‘failed to fulfil its obligations under Articles 296 to 298 of that directive’.
Why it matters: Articles 295 to 305 of Directive 2006/112/EC provide for a ‘common flat-rate scheme for farmers’. The CJEU upheld the European Commission’s view that the Portuguese legislation which exempted farmers from VAT and did not permit them to reclaim input tax contravened this provision.
