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The direct and immediate link test in EU VAT: A new set of criteria to clarify the right of deduction

Nyman, Daniella LU (2023) HARN60 20231
Department of Business Law
Abstract (Uncoded languages)
Die direkte en oombliklike skakel toets sowel as die indirekte skakel toets in die Europese Unie se BTW word nie ingesluit binne die BTW Riglyne nie. Boonop gebruik die verskillende EU lidmaat lande die reg op aftrekking in uiteenlopende maniere. Daarom poog hierdie tesis om ses kenmerke te ontwikkel wat die vereistes van die direkte toets indentifiseer. Sowel as die bogenoemde, werk die drie beginsels van die veiligheid van die reg, ekonomiese werklikheid en fiskale neutraliteit saam in beide toetse en word in ag geneem om hierdie navorsing te versterk.
Abstract (Swedish)
Det direkta och omedelbara koppling testet, även det indirekta koppling testet i moms av EU ingår inte i momsdirektivet. Medlemsstaterna använder sig av avdragsrätten på olika sätt, vilket förvärrar problemet. Av denna anledning görs i denna avhandling sex punkter för att identifiera det direkta testets skyldigheter. Dessutom smälter de tre principerna om rättssäkerhet, ekonomisk verklighet och skatteneutralitet samman i de två testerna och tjänar till att stärka studien.
Abstract (Italian)
Il test sul collegamento diretto e immediato anche il test sul collegamento indiretto nell'I.V.A. dell'UE non sono inclusi nella direttiva IVA. Gli Stati membri utilizzano il diritto alla detrazione in modi diversi, il che aggrava il problema. Per questo motivo, in questa tesi fatti sei punti per individuare gli obblighi del test diretto. Inoltre, i tre principi della certezza del diritto, della realtà economica e della neutralità fiscale si fondono nei due test e servono a rafforzare lo studio.
Abstract
The direct and immediate link test, which is a fundamental requirement for the right of deduction to exist, is not mentioned at all in the EU VAT Directive. Additionally, Member State transposition is not a harmonised process. This leads to divergences in how different EU Member States grant the right of deduction. As a solution to this, the Court of Justice of the European Union allows Member States to request for preliminary rulings on national cases that are unclear. Accordingly, the rulings that are given are meant to relieve the lack of clarity and not worsen it. For some areas of tax law this may function effectively, and this thesis investigates whether the line of rulings has provided the sought after clarity within right of... (More)
The direct and immediate link test, which is a fundamental requirement for the right of deduction to exist, is not mentioned at all in the EU VAT Directive. Additionally, Member State transposition is not a harmonised process. This leads to divergences in how different EU Member States grant the right of deduction. As a solution to this, the Court of Justice of the European Union allows Member States to request for preliminary rulings on national cases that are unclear. Accordingly, the rulings that are given are meant to relieve the lack of clarity and not worsen it. For some areas of tax law this may function effectively, and this thesis investigates whether the line of rulings has provided the sought after clarity within right of deduction cases. The collection of direct and immediate link case law is found to be a confusing and overwhelming mass of evolving criteria that obscures the right of deduction requirements. In view of this, six criteria are developed in this study to pinpoint the requirements of the direct and immediate link test. This is done by analysing the most prominent and sometimes oldest CJEU case law to establish the prevailing questions and their answers. The indirect link test is also studied and findings demonstrate that it adds to the existing obscurity, increasing the need for the criteria developed in this study. The development of a set of criteria for the indirect link test is a recommendation for further studies. The three principles of legal certainty, economic reality and fiscal neutrality can be intertwined and operate conjunctively in both tests and are considered as a foundation to the study. (Less)
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author
Nyman, Daniella LU
supervisor
organization
course
HARN60 20231
year
type
H1 - Master's Degree (One Year)
subject
keywords
Tax Law, Value Added Tax, right of deduction, direct and immediate link test, EU case law, Court of Justice, indirect link test, Fiscal Neutrality, Economic Reality, Legal Certainty, European Union Tax Law, South African Tax Law, presumptions of Member States, irrebuttable presumptions, rebuttable presumptions, developed criteria, table of key cases.
language
English
id
9128303
date added to LUP
2023-06-21 14:25:23
date last changed
2023-06-21 14:25:23
@misc{9128303,
  abstract     = {{The direct and immediate link test, which is a fundamental requirement for the right of deduction to exist, is not mentioned at all in the EU VAT Directive. Additionally, Member State transposition is not a harmonised process. This leads to divergences in how different EU Member States grant the right of deduction. As a solution to this, the Court of Justice of the European Union allows Member States to request for preliminary rulings on national cases that are unclear. Accordingly, the rulings that are given are meant to relieve the lack of clarity and not worsen it. For some areas of tax law this may function effectively, and this thesis investigates whether the line of rulings has provided the sought after clarity within right of deduction cases. The collection of direct and immediate link case law is found to be a confusing and overwhelming mass of evolving criteria that obscures the right of deduction requirements. In view of this, six criteria are developed in this study to pinpoint the requirements of the direct and immediate link test. This is done by analysing the most prominent and sometimes oldest CJEU case law to establish the prevailing questions and their answers. The indirect link test is also studied and findings demonstrate that it adds to the existing obscurity, increasing the need for the criteria developed in this study. The development of a set of criteria for the indirect link test is a recommendation for further studies. The three principles of legal certainty, economic reality and fiscal neutrality can be intertwined and operate conjunctively in both tests and are considered as a foundation to the study.}},
  author       = {{Nyman, Daniella}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{The direct and immediate link test in EU VAT: A new set of criteria to clarify the right of deduction}},
  year         = {{2023}},
}