In the Lithuanian case of Nidera Handelscompagnie BV v Valstybinė mokesčių inspekcija prie Lietuvos Respublikos finansų ministerijos (ECJ Case C-385/09) the ECJ held that Directive 2006/112/EC ‘must be interpreted as precluding a taxable person for VAT purposes who meets the substantive conditions for the right of deduction in accordance with the provisions of that directive and who identifies himself as a taxable person for VAT purposes within a reasonable period following the completion of transactions giving rise to that right of deduction from being denied the possibility of exercising that right by national legislation which prohibits the deduction of VAT paid on the purchase of goods if the taxpayer was not identified as a taxable person for VAT purposes before using those goods in his taxable activity’.
Why it matters: The ECJ held that the Lithuanian legislation contravened the Principal VAT Directive.
