Not the same

The claimant formed a company of which he was the sole director and shareholder to run his one-man business providing cleaning services. The company paid the claimant a monthly salary deducting income tax and social insurance premiums. He wanted to register for VAT separately from the company, but his tax office said that the two should be treated as a single fiscal entity. The matter was referred to the European Court of Justice.

The European Court ruled that an employer and employee relationship existed because, although the cleaning was carried out by the claimant, it was the company that entered into cleaning contracts and paid the claimant. Thus the claimant provided services as an employee acting on behalf of the company. According to article 4(4) of the Sixth Directive, a person in the claimant's position was not a taxable person.

Categories: Tax cases