Tax cases

Business VAT

The claimant and his wife bought land in Germany and had a house built on it which they owned 1:3. The claimant used one room of the house for his specialist writing work which he did in addition to salaried employment. In his VAT returns he claimed VAT on the proportion of building work relating to his office i.e. 12%. His claim was refused.
On appeal his claim was allowed in part: one quarter i.e. the proportion of the property owned by the claimant of 12%. On appeal and cross appeal various questions were referred to the European Court of Justice.
The European Court said that Article 4 defining a taxable person of the Sixth Directive had very wide scope. The claimant's activity in the house was an economic one therefore he was...