Department of Administrative Cases

The print version
20 April, 2018

In the case of deduction of input tax, the preliminary question is referred to the Court of Justice of the European Union

On April 13, the Department of Administrative Cases of the Supreme Court, when reviewing the cassation complaint submitted by SIA “Kuršu zeme” against the judgment of the Administrative Regional Court, decided to stay the proceedings in the case and address the Court of Justice of the European Union. The Supreme Court had doubts as to the interpretation of Article 168(a) of Directive 2006/112/EC – whether this provision contains prohibition to deduct input tax solely on the basis of a conclusion on person's deliberate involvement in the execution of simulation transactions but without identifying the way how and which individuals could have obtained an unjustified fiscal advantage in the result of these transactions, as compared to a situation in which the transactions would have been executed according to their actual circumstances. Therefore, the Supreme Court considers that the preliminary question should be referred to the Court of Justice of the European Union. The proceedings in the case are stayed until the Court of Justice of the European Union gives a ruling on the question referred.