European Court of Justice Issues Preliminary Ruling on Romanian Input VAT Deduction Rights

The European Court of Justice (ECJ) Oct. 4 issued a preliminary ruling for Case No. C-475/23, on Romanian input VAT deduction rights. The taxpayer, an Austria-based company, produced molded parts and processed the parts in Romania. The taxpayer contracted with another Austria-based company that used a subcontractor established in Romania to complete the work. Following a tax inspection, the tax authority denied an input VAT deduction for use of the taxpayer’s crane in the manufacturing process. Upon request for a preliminary ruling, the ECJ held that under Article 168(a) of Council Directive 2006/112/EC: 1) the taxpayer was entitled to deduct ...