European Court of Justice Issues Preliminary Ruling on Portuguese VAT Rules

The European Court of Justice (ECJ) Feb. 5 issued a preliminary ruling for Case No. C-377/23, on Portuguese VAT rules. The taxpayer sold used motor vehicles to final consumers and issued invoices with zero-rated VAT, based on the special VAT regime for second-hand goods. The Tax Authority deemed the operations subject to the normal 23 percent rate. Upon request for a preliminary ruling as to the correct taxable amount for VAT purposes, the ECJ held that under EU Directive 2006/112/EC on the common VAT system and the principal of neutrality: 1) VAT is intended to be charged only to final ...