OS ECJ-TF 2/2020 on the CJEU Decision of 3 March 2020 in Case C-75/18, Vodafone Magyarország Mobil Távközlési Zrt., on Progressive Turnover Taxes

European Taxation, 2020

20 Pages Posted: 30 Dec 2020

See all articles by João Félix Pinto Nogueira

João Félix Pinto Nogueira

International Bureau of Fiscal Documentation; University of Cape Town (UCT)

Francisco Alfredo Garcia Prats

Universitat de València

Werner C. Haslehner

Universite du Luxembourg

Volker Heydt

Independent

Eric Kemmeren

Tilburg University; Fiscal Institute Tilburg

Georg Kofler

Vienna University of Economics and Business - Institute for Austrian and International Tax Law

Michael Lang

Vienna University of Economics and Business

Pasquale Pistone

Vienna University of Economics and Business

Stella Raventos-Calvo

affiliation not provided to SSRN

Emmanuel Raingeard de la Blétière

Independent

Isabelle Richelle

Independent

Alexander Rust

Independent

Rupert Shiers

Independent

Date Written: October 27, 2020

Abstract

This article is a commentary on the decision of the Court of Justice of the European Union on the Vodafone case, C-74/78 on progressive turnover taxes.

In our view, the Court’s decision provides clarifications for ascertaining the compatibility of domestic turnover taxes with the fundamental freedoms and with Article 401 of the VAT Directive. This is particularly relevant in the current context, in which some Member States have adopted or plan to adopt turnover-based digital services taxes.

Although provided with the opportunity, the Court has avoided to explicitly address AG J. Kokott’s arguments relating to the correlation between the chosen distinguishing criterion (i.e., turnover) and the seat of the undertakings and the question whether indirect discrimination is to be taken to exist in any case if the distinguishing criterion was intentionally chosen with a discriminatory objective. Rather, the Court straightforwardly found that the distribution of the burden of a turnover tax between domestic and foreign or foreign-owned taxpayers is not an indicator of covert discrimination, unless the features of such tax “inherently” create a discrimination; the mere fact that most of the taxpayers are non-residents or owned by non-residents or that most of the tax raised is paid by them is just a “fortuitous” effect.

We note that this decision should not be seen as giving Member States carte blanche for all technical features of domestic digital services taxes, e.g., the choice of thresholds, the earmarking of revenues, or consolidation rules. One should also not forget other non-EU law concerns, given the structural inefficiencies that this type of taxes presents (e.g., economic effects, trade law, domestic constitutional law, double taxation, etc).

Keywords: Taxation, Tax law, European taxation

JEL Classification: K33, K34, F13, E62, D78, E62, F02, F23, F42, H20, H22, H23, H25, H26, H87, O19, O23, O24

Suggested Citation

Pinto Nogueira, João Félix and Garcia Prats, Francisco Alfredo and Haslehner, Werner Christof and Heydt, Volker and Kemmeren, Eric and Kofler, Georg and Lang, Michael and Pistone, Pasquale and Raventos-Calvo, Stella and Raingeard de la Blétière, Emmanuel and Richelle, Isabelle and Rust, Alexander and Shiers, Rupert, OS ECJ-TF 2/2020 on the CJEU Decision of 3 March 2020 in Case C-75/18, Vodafone Magyarország Mobil Távközlési Zrt., on Progressive Turnover Taxes (October 27, 2020). European Taxation, 2020, Available at SSRN: https://ssrn.com/abstract=3720072

João Félix Pinto Nogueira (Contact Author)

International Bureau of Fiscal Documentation ( email )

Rietlandpark, 301
Amsterdam, 1019 DW
Netherlands
+31205540100 (Phone)

HOME PAGE: http://https://www.ibfd.org/IBFD-Profiles/Jo-o-F-lix-Pinto-Nogueira

University of Cape Town (UCT) ( email )

Private Bag X3
Rondebosch, Western Cape 7701
South Africa

Werner Christof Haslehner

Universite du Luxembourg ( email )

Luxembourg

Volker Heydt

Independent

Eric Kemmeren

Tilburg University ( email )

Warandelaan 2
Tilburg, Noord-Brabant 5037AB
Netherlands
+31.13.466.8129/2412 (Phone)
+31.13.466.3073 (Fax)

HOME PAGE: http://www.tilburguniversity.edu/webwijs/show/kemmeren-3.htm

Fiscal Institute Tilburg ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31.13.466.8129/2412 (Phone)
+31.13.466.3073 (Fax)

HOME PAGE: http://www.tilburguniversity.edu/webwijs/show/kemmeren-3.htm

Georg Kofler

Vienna University of Economics and Business - Institute for Austrian and International Tax Law ( email )

Welthandelsplatz 1
Buildind D3
Vienna, VIenna 1020
Austria

Michael Lang

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, 1020
Austria

Pasquale Pistone

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, Wien 1020
Austria

Stella Raventos-Calvo

affiliation not provided to SSRN

Isabelle Richelle

Independent

Alexander Rust

Independent

Rupert Shiers

Independent

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