Link: https://curia.europa.eu/jcms/upload/docs/application/pdf/2021-07/cp210117en.pdf

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Court of Justice of the European Union

PRESS RELEASE No 117/21

Luxembourg, 1 July 2021

Judgment in Case C-521/19 Tribunal Económico Administrativo Regional de Galicia

In the determination of the taxable amount of a transaction concealed by taxable persons for VAT purposes, the amounts paid and received as reconstituted by the tax authority must be regarded as already including that tax

Any other interpretation would be contrary to the principle of VAT neutrality

The Lito group is a group of companies responsible for the management of infrastructure and orchestras for patron saint feast days and village festivals in Galicia (Spain). In the context of an activity subject to value added tax (VAT), an agent for performing artists would negotiate performances by orchestras on behalf of the Lito group with the municipal festival committees. The festival committees paid in cash and there were no invoices. These payments were not declared to the tax authority for the purposes of either corporate tax or VAT. The agent would receive 10% of the Lito group’s income. Payments to him were also made in cash, with no invoices, and were not declared, either. Since the agent did not issue invoices, he did not complete VAT returns. 

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