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Local News

1. Mandatory Online Filing of VAT Returns

The Office of the Commissioner for Revenue reminded taxable persons registered under Article 10 of the VAT Act that as from 15 February 2023 VAT returns should only be filed electronically using the VAT e-Services on the CfR website.

2. Administrative Review Tribunal

Case no. 107/2020 VG – XXX vs Kummissarju tat-Taxxi – 16/01/2023

This appeal was in connection with four assessments amounting to EUR 5,168 plus EUR 1,033 administrative penalties served to XXX by the Commissioner. The Commissioner raised a preliminary plea contesting the validity of the appeal on grounds that it was filed beyond the thirty-day limit allowed at law. In defence appellant claimed that the AR card was signed by his son who returned the envelope containing the notices to the postman. The envelope was subsequently collected from the local Maltapost branch by appellant’s wife some ten days later (both son and wife filed sworn affidavits as evidence). This evidence was however contradicted by a Maltapost official, produced as witness by the Commissioner, who explained in detail how the AR card procedure works and that what was alleged by appellant was very unlikely to occur. On the basis of this evidence the Tribunal upheld the Commissioner’s preliminary plea by declaring the appeal invalid.

Case no. 124/2018 VG – XXX vs Kummissarju tat-Taxxi– 23/02/2023

XXX appealed against assessments served to it by the Commissioner amounting to EUR 153,462 (inclusive of administrative penalties and interest) for tax periods spanning 2016 to 2018, following a credit control exercise. Appellant company owned and operated a pig farm which had to be modernised in line with the EU pig industry normative with the result that the company incurred a substantial amount of capital expenditure. It transpired however, that during the credit control exercise the company failed to produce all the supporting tax invoices and much worse there appeared to be irregularities between these amounts and the amounts showing in a particular supplier’s tax records when cross-checked. The company relied on a sworn statement by the person in charge of the project confirming the purpose and works carried out and a number of photos relating to the structural works, evidence which the Tribunal considered inappropriate to support the input VAT claim which it reminded can only be deducted on the basis of inter alia valid tax invoices. The Tribunal dismissed the appeal and confirmed the assessments raised by the Commissioner.

Case no. 18/2018 VG – XXX Limited vs Kummissarju tat-Taxxi – 23/02/2023

XXX, a company in the business of construction of residential and non-residential buildings, appealed against assessments amounting to EUR 211,707 (inclusive of administrative penalties and interest) served on it by the Commissioner covering tax periods 01/07/2015 to 31/10/2016. The assessments were raised following a credit control exercise carried out by VAT Inspectors which concluded that the input VAT credit claim was found not to be attributable to the taxpayer’s economic activity and furthermore when cross-checking invoices raised by sub-contractors, serious irregularities were uncovered. As a result, the Tribunal dismissed the appeal and confirmed the assessments raised by the Commissioner.

EU News

1. VAT in the Digital Age: Interview with Carmen Muniz Sanchez, Head of Sector in DG TAXUD’s VAT Policy Unit – 31/03/2023

This interesting interview deals with a fundamental question, namely, how bringing VAT into the digital age can help restore a level playing field in the hospitality sector. Ms Muniz Sanchez set out to explain why the proposed rules on the provision of short-term accommodation via electronic platforms are needed specifically in this sector and how they can contribute to render the hospitality sector more dynamic and appropriate for the digital age.

The full interview is available on: https://taxation-customs.ec.europa.eu/news/how-bringing-vat-digital-age-can-help-restore-level-playing-field-hospitality-sector-2023-03-31_en

2. VAT Committee Meetings

The 122nd Meeting of the VAT Committee was held on 20th March 2023 with the following questions for discussion on the agenda:

  • Vouchers in the form of City Cards – follow up (Denmark)
  • Application of the VAT exemption to educational services (Poland)
  • Permanent address or habitual residence on non-EU travellers – further analysis (Poland)
  • Importation of leased goods to be used for taxed activities – right of deduction of the lessee (Commission)
  • Initial VAT reflections on non-fungible tokens (Commission)

For further reading: https://circabc.europa.eu/ui/group/cb1eaff7-eedd-413d-ab88-94f761f9773b/library/5c82345b-3eeb-4824-b35e-d73caf17d9e6?p=1&n=10&sort=modified_DESC

3. VAT Expert Group Meetings

The VEG held its 33rd Meeting on 14th March 2023 with the discussion focussing once more on the VAT in the Digital Age proposal adopted by the Commission on 8 December 2022.

For further reading: https://circabc.europa.eu/ui/group/cb1eaff7-eedd-413d-ab88-94f761f9773b/library/7290a16a-84f5-4f0c-bc98-3f60151b22be?p=1&n=10&sort=modified_DESC

4. CJEU Decisions – Latest Update

Case C-695/20 – Fenix International Ltd – 28/02/2023

(RE: Art. 28 and 397 of VAT Directive – Taxable person, acting in his or her own name but on behalf of another person – Provider of services by electronic means – Implementing Regulation 282/2011 – Article 9a(1) – Presumption – Validity)

Fenix, a company registered for VAT purposes in the UK, operated on the internet a social media platform known as ‘Only Fans’, which it offered to users who can either be ‘creators’ or else ‘fans’. Creators had a profile on the platform to which they uploaded content such as photos, videos and messages which content fans can access against an ad hoc payment or the payment of a monthly subscription. In addition to the platform Fenix provided the device to enable financial transactions consisting in the collection of the payments made by the fans and the subsequent payments to the creators to be carried out. Creators received 80% of the payments made by the fans and collected by Fenix with the remaining 20% retained as consideration for its services. Fenix paid and remitted UK VAT on the 20% it retained but HMRC argued that since Fenix acted in its own name it was deemed to have received and supplied those services itself and hence VAT should have been charged on the whole amount. Fenix disputed the assessment notices challenging the validity of the legal basis for the tax assessments namely Article 9a(1) of Council Implementing Regulation 282/2011, which provides for the application of Article 28 of the VAT Directive where electronically supplied services are supplied inter alia through a portal, such as a marketplace for applications, with the taxable person taking part in those supplies being presumed to be acting in his own name but on behalf of the provider of those services.

The referring Court, the UK First-tier Tribunal (Tax Chamber), where the dispute ended up stayed proceedings and asked the ECJ whether Article 9a(1) of the Council Implementing Regulation (EU) 282/2011 was invalid in that it goes beyond the implementing power or duty of the Council established by Article 397 of the VAT Directive insofar as it supplemented and/or amended Article 28 of the VAT Directive.

The Court recalled that Article 397 of the VAT Directive confers on the Council an implementing power whereby the Council, acting unanimously on a proposal by the Commission, is to adopt measures necessary to implement the VAT Directive. It followed that this implementing power entails, in essence, the power to adopt measures which are necessary or appropriate for the uniform implementation of the provisions of the legislative act on the basis of which they are adopted and which merely specify the content of that act, in compliance with the essential general aims pursued by that act, without amending or supplementing it, in its essential and non-essential elements. Thus, after an examination of the facts at issue, the Court was of the view that Article 9a(1) of Implementing Regulation 282/2011 complied with the general aims pursued by Article 28 of the VAT Directive being necessary for the uniform implementation of Article 28 whilst  not supplementing or amending the content of Article 28.

As a result the Court ruled that it had disclosed no factor of such a kind as to affect the validity of Article 9a(1) of Council Implementing Regulation (EU) 282/2011 in the light of Articles 28 and 397 of the VAT Directive.

Case C-664/21 – NEC Plus Ultra Cosmetics AG – 02/03/2023

(RE: Art. 138(1) of Council Directive 2006/112/EC – Exemptions for intra-community transactions – Supply of goods – Principles of tax neutrality, effectiveness and proportionality – Compliance with substantive requirements – Time limit for the submission of evidence)

NEC, a Swiss company, sold goods from its warehouse in Slovenia which were transported by a third party to Croatia where they were consigned to the customer, another taxable person. NEC did not charge VAT as they deemed the intra-community supply to be exempt. However, NEC failed to produce the tax authority all the documentation necessary to show that the goods had effectively been transported outside of Slovenia and as a result the tax authority issued tax assessments. NEC lodged an appeal in the course of which however, it was not allowed to produce any further documentation on the basis of the national legislation.

The Supreme Court of Slovenia, where the case ended up, stayed the proceedings and asked the Court whether Articles 131 and 138(1) precluded national legislation which prohibited the submission of new evidence to satisfactorily demonstrate that the substantive elements of Article 138(1) of the VAT Directive had been met.

The Court recalled or rather repeated that the principle of neutrality is a fundamental element of the VAT Directive and in principle may not be limited. Furthermore, settled case law has established that input VAT deduction is also to be allowed where the taxable person had satisfied the substantive elements but failed to meet the formal requirements. That would not be the case, however, where the non-compliance with the formal requirements prevents the tax authority from being in a position to establish, on the basis of conclusive evidence, whether the substantive elements had effectively been satisfied, a matter which is for the national court to decide.

In the light of the foregoing the Court ruled that Articles 131 and 138(1) of the VAT Directive did not preclude national legislation which prohibited the production and gathering of new evidence which establishes that the substantive conditions laid down in Article 138(1) were satisfied during the administrative procedure which resulted in the issuing of the tax assessment notice.


While every effort was made to ensure that the contents of this newsletter are accurate and reflect the current position at law and in practice, we do not accept any responsibility for any damage which may result from a change in the law or from a different interpretation or application of the local law by the authorities or the local courts.

The information contained in the newsletter is intended to serve solely as a guidance and any contents of a legal nature therein do not constitute or are to be interpreted as legal advice. Consulting your tax practitioner is recommended in case you wish to take any decision connected to contents of this newsletter.

Matthew Zampa


Charles Vella

Senior VAT Advisor

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