International Cases update – July 2012

In July 2012 the following cases dealing with GST/VAT were handed down in New Zealand, Canada, the UK and the ECJ.  The most interesting decision is that of New Zealand’s highest court in granting the taxpayer special leave to appeal in a case involving the important issue of liability of receivers to pay GST.

New Zealand 

Supreme Court

United Kingdom

First Tier Tax Tribunal

  • A Soldier v Revenue & Customs [2012] UKFTT 388 – VAT – new means of transport – private motor car supplied for removal to Germany – bought by member of UK armed forces based in Germany and taken there for two days – returned to UK because Appellant on temporary training here before six month operational deployment in Africa – car left in the UK during deployment – during deployment, Appellant notified that his German stationing was being terminated and he was being re-based in the UK – whether Appellant had sufficient intention to remove the vehicle from the UK when initially supplied to him to qualify for UK zero rating on that supply to him – X v Skatteverket (ECJ) considered – held yes – appeal allowed
  • Darragh House Ltd v Revenue & Customs [2012] UKFTT 423 – VAT – disallowance of  input tax claim – question of fact whether expenditure used or to be used for purpose of business – appeal allowed in part
  • Drumtochty Castle Ltd v Revenue & Customs [2012] UKFTT 429 – VAT; use of castle for function such as wedding; additional supplies of  overnight accommodation, afternoon tea and breakfast; single or multiple supplies; whether supplies including use of castle exempt under VATA 1994, Schedule 9 Group 1; whether exemption excluded by item 1(d)

European Court of Justice

  • Deutsche Bank [2012] EUECJ C-33/11 – Sixth Directive – Exemptions – Article 15(6) – Exemption for the supply of aircraft used by airlines operating for reward chiefly on international routes – Supply of aircraft to an operator who makes them available to such an undertaking – Concept of ‘operating for reward on international routes’ – Charter flights
  • J J Komen en Zonen Beheer Heehugowaard [2012] EUECJ-326/11 – Sixth VAT Directive – Article 13B(g), read in conjunction with Article 4(3)(a) – Supply of buildings and land upon which they stand – Supply of a building undergoing work with the view to the creation of a new building by transformation – Continuation and completion of the work by the purchaser after the supply – Exemption from VAT
  • International Bingo Technology [2012] EUEC C-377/11 – Sixth VAT Directive – Articles 11A(1)(a), 17(5) and 19(1) – Organisation of games of bingo – Legal obligation to use part of the card price to pay winnings to players – Calculation of the basis of assessment
  • Littlewoods Retail Ltd and others [2012] EUECJ C-591/10 – Second and Sixth VAT Directives – Input tax – Refund of excess – Payment of interest – Procedures
  • Redlihs [2012] EUECJ C-263/11 – Sixth VAT Directive – Directive 2006/112/EC – Concept of ‘economic activity’ – Deliveries of timber in order to alleviate the damage caused by a storm – Reverse charge procedure – Failure to register in the register of taxable persons – Fine – Principle of proportionality


Tax Court

  • Daruwala v The Queen 2012 TCC 257 – whether purchase of newly constructed home exempt from GST on the basis that the property had previously been used as a residence by the builder – whether property used by builder as residence
  • Scott v The Queen 2012 TCC 274 – Entitlement to rebate of portion of GST paid on the purchase of motor vehicle subsequently sold back to dealership because of persistent problems – whether two separate transactions or the rescission/cancellation of the first transaction
  • Tele-Mobile Company Partnership v The Queen 2012 TCC 256 – Entitlement to input tax credits as a result of Billing Credits and mail-in rebates provided to customers- whether credits and rebates a “coupon” or voucher or simply a discount on the contract
  • Vincent v The Queen 2012 TCC 269 – Entitlement to input tax credits in respect of real estate business – substantiation of claims

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