International Cases Update – February 2013

In February 2013 a number of VAT/GST decisions were handed down in the UK and Canada. Of particular interest is the decision of the UK Court of Appeal in BAA Ltd v Revenue & Customs [2013] EWCA 122. The issue in this case was whether the BAA VAT Group was entitled to an input tax credit claim for VAT charged on the acquisition of professional and advisory services by a company known as ADIL in respect of a take-over bid by ADI for BAA. At the time ADIL made the acquisitions, it was not registered for GST and it was not part of the BAA VAT Group. At first instance, the First Tier Tribunal found that credits could be claimed – [2010] UKFTT 43. On appeal, the Upper Tax Tribunal allowed the Revenue’s appeal – [2011] UKUT 258. The Court of Appeal dismissed the appeal by the taxpayer. My analysis of the decision can be found here.

United Kingdom

Court of Appeal

  • BAA Ltd v Revenue & Customs [2013] EWCA 122 – VAT – whether representative of VAT Group entitled to input tax credits for services received by member entity at the time when the member entity was not part of the group – whether member company carrying on an economic activity at the time it acquired the services – whether there was a “direct and immediate” link between the acquisition of services and the outward taxable supplies by the VAT Group – case analysis

Upper Tax Tribunal

  • Birmingham Hippodrome Theatre Trust Ltd v HMRC [2013] UKUT 57 – VAT – claim for repayment of overpaid output tax where irrecoverable repayments had been wrongly made of input tax attributable to other fiscal years – claim denied and appeal dismissed
  • HMRC v Abdul Noor [2013] UKUT 71 – VAT – whether first-tier Tribunal had jurisdiction to consider legitimate expectations to recover pre-registration input tax on supply of services – No- decision of First-tier Tribunal allowing taxpayer’s appeal reversed

First Tier Tribunal

  • Antiques Within Ltd v Revenue & Customs [2013] UKFTT 89 – Value Added Tax – antiques centre supplying stallholders with space and a sales service – whether one single exempt supply of a right over land or one single standard rated supply of a sales service – neither – two distinct individually rated supplies – Appeal allowed in part
  • Chi Drinks Ltd v Revenue & Customs [2013] UKFTT 94 – VAT – zero rating – food – coconut water – is it a beverage? – yes – supplies held to be standard rated – Group 1, Schedule 8, VAT Act 1994
  • Massey (t/a The Basement Restaurant) v Revenue & Customs [2013] UKFTT 102 – VAT– Transfer of going concern – Restaurant premises reverting to Landlord on termination of tenancy – purchase of  assets by the Landlord – was there a transfer of a going concern – yes – Appeal dismissed
  • Westinsure Group Ltd v Revenue & Customs [2013] UKFTT 114 – VAT – exemption for provision of services of an insurance intermediary – whether exemption applies to services provided to facilitate insurance brokers obtaining better terms and  related benefits from insurance companies and other insurance related services – Article 135 (1)(a) Directive 2006/112 EC- Schedule 4 Group 2 Value Added Tax Act 1994

Canada

Federal Court of Appeal

Tax Court

  • GF Partnership v The Queen  2013 TCC 53 – whether builder and developer of residential subdivisions liable to GST on consideration including development charges – or whether development charges payable directly by purchaser and therefore not included in the price
  • FP Newspapers Inc v The Queen 2013 TCC 44 – whether partner in partnership entitled to input tax credits for services acquired for own benefit – whether partner carrying on commercial activities of the Partnership therefore entitled to input tax credits

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