The CJEU delivered its judgment in Rádio Popular – Electrodomésticos SA v Autoridade Tributária e Aduaneira C-695/19 on 8 July 2021. The case related to the entitlement of Rádio Popular (RP) to reclaim input VAT incurred on costs associated with the sale of extended warranties. The case dealt with the interpretation of Article 174(2)(b) and (c) of Council Directive 2006/112/EC “the EU VAT Directive”, which outlines the method of calculating the deductible amount in a dual-use scenario. Article 174(2) outlines the amounts that can be excluded from the calculation; paragraph (b) excludes the amount of turnover attributable to incidental real estate and financial transactions, and paragraph (c) excludes the amount of turnover attributable to the transactions specified in points (b) to (g) of Article 135(1) of the EU VAT Directive in so far as those transactions are incidental.
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