Taxes, Duties, Levies and Charges as Part of the Taxable Amount for Value Added Tax

Abstract:

Article 78(a) VAT Directive clearly states that taxes, duties, levies and charges must be included in the taxable amount for Value Added Tax (VAT). The Court of Justice of the European Union (CJEU) has substantially mitigated the scope of this rule. Following the CJEU’s ruling in Lisboagás, the amount of a tax, duty, levy or charge may need to be included in the taxable amount under Article 73 if it cannot be included in the taxable amount on the basis of Article 78(a).

A fair amount of uncertainty still exists as to the relation between Article 73, Article 78(a) and Article 79(c) VAT Directive is unclear. This interrelationship is the main topic of this article. The authors provide for criteria to establish whether (amounts of) taxes, duties, levies or charges are to be included in the taxable amount.

They show that – contrary to CJEU case law – Article 78(a) cannot be interpreted in the light of Article 73 VAT Directive. Also, they clarify that if the amount of a tax, duty, levy or charge must be included in the taxable amount on the basis of Article 73, it cannot be excluded from it on the basis of Article 79(c). Furthermore, they conclude that the reference in Article 84 to Article 78(a) VAT Directive has become outdated.