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Ombudsman Backs EU Judgment On Spanish VAT

by Ulrika Lomas, Tax-News.com, Brussels

22 March 2017

The European Ombudsman has supported the European Commission's decision to close an infringement complaint against a court ruling concerning the Spanish value-added tax (VAT) system.

The case concerns a complaint submitted by a Spanish citizen to the Commission. The complainant alleged that the Spanish courts were wrong in endorsing the decision of the Spanish tax authorities that he had no right to a VAT deduction in relation to certain goods and services.

The Commission informed the complainant that it is only able to intervene in cases involving a potential breach of EU law by a member state's authorities, and that it considers the Spanish VAT legislation to be compliant with this law. The Commission intended to close the case, and invited the complainant to submit comments on the matter.

The complainant further argued that a judgment of the Spanish court constitutes an "administrative practice" of the Spanish authorities that is not compliant with EU law. The Commission countered that, according to the case law of the EU Court of Justice, an "administrative practice" has to be general and consistent, and that an isolated judgment which, in addition, is based on the appreciation of facts, does not qualify as an "administrative practice."

The Commission then closed the case. The complainant took the case to the Ombudsman.

The Ombudsman concluded that there is "nothing to suggest that the Commission was wrong to close the case and it has provided the complainant with its reasons for doing so." It said there had been no maladministration by the Commission.

TAGS: court | compliance | VAT rates | tax | European Commission | value added tax (VAT) | VAT legislation | law | legislation | Spain | European Union (EU) | services | VAT compliance matters | Europe

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